What types of transactions are treated as a "disqualified transaction"?
Under Internal Revenue Code Section 408, the acquisition by an IRA
or an individually-directed account under a qualified retirement plan
of any collectible is treated as a distribution from the IRA or account
in an amount equal to the cost to the IRA or account of the collectible
(Code Sec. 408(m)(1)). A collectible is any work of art, rug or antique,
metal or gem, stamp or coin, alcoholic beverage, or any other tangible
personal property specified by IRS for this purpose (Code Sec. 408(m)(2)).
In general, under Code Section 408, an IRA cannot invest in life insurance contracts or collectibles defined below:
- Any work of art
- Any metal or gem
- Any alcoholic beverage
- Any rug or antique
- Any stamp
- Most coins
- Baseball cards
Please contact one of our Self Directed IRA Experts at 800-472-0646 for more information.
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