His Self-Directed IRA Owned a $600,000 Rental. One Turn of a Wrench Put the Entire Account at Risk.

Joe's $180 plumbing repair on his self-directed IRA-owned duplex could lead to a prohibited transaction, rendering the entire $600,000 account subject to ordinary taxation. Federal rules strictly prohibit IRA owners from personally performing any repairs on IRA property, regardless of cost, without any dollar-based safe harbor. A deemed distribution of $600,000 would significantly increase his adjusted gross income, potentially making 85% of his Social Security benefits taxable and incurring higher Medicare premiums two years later.