Self Directed IRAs are like checkbook control towers. They offer customers the ability to use their retirement funds for completely stress free investing, to include self directed IRA real estate investments. Following the IRS rules for these investments is of paramount importance. The IRA contribution limits 2011 are already out. It is essential for investors to completely understand IRA contribution limits 2011, before opting for Self Directed IRAs. There are only a few prohibited asset types should be avoided while pursuing Self Directed IRAs. Prohibited asset types include investments in life insurance, collectibles including antiques, metals except certain bullion types, gems, coins (with exception of certain US mints) stamps, alcoholic beverages, and movable (tangible) personal properties.
A Self Directed Roth IRA is more similar to the traditional IRA, but the qualified distributions are tax free and contributions are non-tax deductible. The beauty of this is that you get to choose your own investment areas as opposed to having some financial organization decide it for you. It also gives you the right to make purchases and write checks on behalf of individual retirement accounts. The check book control option chosen directs the transactions through a limited liability company (LLC), which gives the owner direct access and greater control to the Roth IRA assets at reduced administrative fees.
IRS has always allowed IRAs to purchase or hold domestic and foreign real estate and raw land. A Self Directed IRA allows for the purchase of real estate by simply writing a check. The infrastructure essentially remains the same on self directed IRA real estate as with the self directed IRA, or Self Directed Roth IRA LLCs. These IRA investment vehicles are highly advantageous for investing IRA funds tax free, in real estate. By being in control of the Self Directed IRA real estate grants, you have the power to make decisions for your IRA. The gains from the purchase of real estate in this manner are tax free until a distribution is completed. Solo 401K is a great way of using self directed IRAs. These are tax free designs created for independent contractors and owners of small businesses. These are one of the most desirable investment options; however they require you to have fulfilled the necessary conditions, including those stated above.