Under the correctly structured self directed IRA, it can be 100% legal to invest your retirement funds into many alternative assets such as real estate, tax liens, gold, mortgages and even a small business or franchise, and more.
There are only two investments that are not considered permissible under the Internal Revenue Code (IRC). They are life insurance and collectibles.
Most prohibited transactions are the result of inappropriate interaction between your retirement plan and a disqualified party. The definition of a disqualified party in regards to self directed IRAs is:
A self directed IRA, or any retirement plan, is intended to benefit the retirement account holder upon retirement – not any time before. Self directed IRA rules prohibited any activity that is not for the exclusive benefit of the retirement plan.
Your self directed IRA cannot, directly or indirectly, sell, exchange or lease any property to or with you or a disqualified party. Some examples of prohibited transactions include (but are not limited to):
There are countless ways in which you can maximize your retirement account’s potential without violating the self directed IRA rules. AES has helped thousands of investors to successfully navigate the self directed IRA rules and ultimately satisfy their retirement objectives.
At Asset Exchange Strategies, LLC we have had conversations with potential self-directed IRA clients many thousands of times and the myths continue to live on after 20 years in the business. Some things like Sasquatch or area 51 seem to perpetuate in people’s minds without any substantial evidence the concept is correct or myth. Let’s […]
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