All You Need To Know About A Self Directed IRA

self directed ira

courtesy: google images

The Basics

A self directed IRA, sometimes known as a checkbook IRA, allows you, the owner, to control how your retirement money is invested.

A self directed IRA offers the same attractive benefits that other IRAs offer, tax deductions and tax-free withdrawals. Before investing into a self directed IRA you should understand non-traditional investments because the benefit of self directed IRAs is the broader investment choices that are made available. This range of available investments is highly regulated by the IRS.

In addition to the traditional investments in stocks, bonds and mutual funds, with a self directed IRA the non-traditional investments can include: precious metals (gold, silver, platinum), real estate,  property renovation, passive rental income, mortgages, farmland, limited partnerships and commercial paper for example.

Additional Detail

A self directed IRA that invests in real estate is simply called a self directed IRA real estate. If investing in gold, it would be called a self directed IRA precious metals.

A self directed IRA LLC is often set up for tax purposes.

Self Directed IRA Rules

As with all IRAs, you are not allowed to borrow money from a self directed IRA, sell property to it or use it as collateral for a loan.

Self directed IRA rules require that a trustee or custodian hold the assets of the IRA for the IRA owner. This trustee or custodian maintains the assets, records and statements. It also files any required IRS reports. Trust companies such as Pensco Trust Company specialize in managing self directed IRAs.

If you are thinking about opening up a self directed IRA, before moving forward you may want to contact a trust company like Pensco Trust for example. They can answer any concerns or questions you may have. Trust companies are available to help you understand self directed IRAs but to also help you set up the necessary documents and properly title your accounts. You are better off not going it alone, take advantage of a trust company’s expertise.