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IRA Investment Options

When it comes to using retirement funds like an IRA or 401(k) Plan to make investments, the IRS does not dictate what you can invest in, but only identifies certain types of investments that are prohibited. Accordingly, when determining whether an IRA may make an investment, it is important to identify the prohibited transaction rules. Typically, when making IRA investments, a self directed IRA structure is utilized. A self-directed IRA is a retirement investment vehicle that allows one to use their IRA funds to make non-traditional investments such as real estate tax-free! The most popular type of self-directed IRA structure is the self directed IRA LLC also known as the checkbook control IRA or IRA with checkbook control.

A self directed IRA LLC structure with checkbook control involves the establishment of a special purpose limited liability company (“LLC”). The LLC will be owned by the IRA and managed by the IRA holder (you). The retirement funds (IRA, Roth IRA, SEP, SIMPLE, 401(k), 403(b), 457(b), etc) would then be transferred or rolled over tax-free from the current IRA custodian to a new IRA Passive Custodian. An IRA Passive Custodian, unlike a traditional IRA custodian, allows for traditional as well as non-traditional investments such a real estate. The new IRA Passive Custodian would then transfer the IRA funds tax-free to the newly established special purpose IRA LLC. At that point, the IRA funds would be available for investment.

IRA Investment

A self directed IRA LLC offers one the ability to use his or her retirement funds to make almost any type of investment on their own without requiring the consent of any custodian or person. The IRS, pursuant to Internal Revenue Code Sections 408 and 4975, only describes the type of investments that are prohibited, which are very few.

Self Directed IRA Investments

The following are some examples of types of investments that can be made with your self directed IRA LLC:

  • Residential or commercial real estate
  • Domestic or Foreign real estate
  • Raw land
  • Foreclosure property
  • Mortgages
  • Mortgage pools
  • Deeds
  • Private loans
  • Tax liens
  • Private businesses
  • Limited Liability Companies
  • Limited Liability Partnerships
  • Private placements
  • Precious metals and certain coins
  • Stocks, bonds, mutual funds
  • Foreign currencies

To learn more about the numerous IRA investment opportunities, please contact a Self Directed IRA Expert at 800-472-0646 or visit www.irafinancialgroup.com.

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Posted in Self-Directed IRA

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