The Street: “Some Americans are using their Individual Retirement Accounts to invest in cattle, sports teams and restaurants, betting they can make more money than in the stock and bond markets. . . . Popular options include real estate investments and small-business loans.”
Forbes: “Church bonds. Mexican land. Pay telephones. Swiss annuities. Bus shelters. Gold coins. Paintings. Mortgages. Untraded stock. Bull sperm. Bet you don’t know which five of these ten assets are permissible investments in Individual Retirement Accounts. . . . If you’re interested in unconventional assets, it’s worth boning up on the rules, because most lawyers and IRA custodians have only partial knowledge.”
See the table of custodians that allows self directed IRA investments.
CNBC: “If you recently watched your individual retirement account or 401(k) drop by double digits, you may wonder if there is a better way to sock away money in an uncertain economy. What if you could replace some of your investments with tax-deferred holdings not tied to the troubles on Wall Street? Maybe you’d prefer to invest in cattle in Wyoming, a gas station in Philadelphia or an underwater cemetery in Miami.”
All IRA owners who have made self-directed investments into an IRA LLC and anybody considering do so should read Jeff Nabers’ article called “What is the Plan Asset Rule?” This rule turns assets owned by an entity into assets that are deemed to be assets of the IRA with the consequence that any transaction between a disqualified person and the entity is a prohibited transaction.
“The plan asset rule, among other things, is used to determine whether or not a retirement plan is involved in a prohibited transaction.”
See my post called “Department of Labor Regulation 29 CFR 2510.3-101 – the Plan Asset Rules.”