Guidant Financial Group Blog

They say a man’s (or woman’s) home is his castle – but his Monet? Or how about his Van Gogh?

A new article out in The New York Times today examines the burgeoning trend of selling real estate at art auctions (see Can Houses Be Sold as Art?).

This week a modernist home in Palm Springs sold for $15 million at a Christie’s auction. This is a record for a home sold at an art-house auction. Apparently, investors and architecture enthusiasts have been long curious as to whether architecturally significant homes could be sold at auction and yield a competitive price. Apparently they can.

But for self-directed IRA investors, this opens up another discussion altogether. Considering the IRS’s limitation on investments in collectibles, if homes are being sold like pieces of art – do some then qualify as a prohibited transaction?

Although we have had several clients roll more than $1 million in retirement funds into a self-directed IRA, we are pretty sure that purchasing mega-million-dollar homes is not something our clients are considering on a regular basis (yet).

Should this trend of selling homes as art continue, we may see a more solid opinion from the IRS handed down soon.