Self-Directed IRA FAQ

Below you will find some of the most common questions and answers about the IRA LLC strategy.

What is a “self-directed” IRA?

A self-directed IRA is an individual retirement account that gives you complete control over your investment choices. Unlike a typical IRA at a brokerage firm, you are not limited to stocks, bonds, or mutual funds. This means you can take advantage of investing in alternative assets like real estate, an LLC, bitcoin, startup companies, mortgage notes, precious metals, promissory notes and tons of other alternatives.

I thought stocks, bonds, CDs or mutual funds were the only investments allowed in a retirement account?

That is a common misconception. In truth, the IRS never limited your retirement account to Wall Street. That limitation was implied by stockbrokers and the American public believed it.

The IRS only limits you from 2 types of investments:

  1. Collectibles (stamps, baseball cards, collectible coins, collectible alcohol, etc.)
  2. Life insurance

What are the benefits of a self-directed IRA?

The two main benefits of a self-directed IRA are options and control. Opening a self-directed IRA provides the account holder with total control of what you choose to invest in, but only if the investment complies with IRS rules and regulations. A huge benefit of any IRA includes tax-deferred or tax-free earnings.

I have not heard of a self-directed IRA before; are they new?

These retirement accounts are not new. The American public was given the gift of the IRA in 1975. The IRA may not have been called a “self-directed” IRA, but it was. Any restrictions placed upon an IRA were placed by brokerage firms that sold stocks, bonds and mutual funds AND who made money selling those assets to your account.

What investments are not allowed in a self-directed IRA?

The IRS only limits you from 2 types of investments:

  1. Collectibles (stamps, baseball cards, collectible coins, collectible alcohol, etc.)
  2. Life insurance

What investments are allowed in a self-directed IRA?

Here are some of the alternative investment options that our current clients have taken advantage of with their self-directed IRA:

  • Real Estate (commercial and/or residential)
  • Precious Metals
  • Limited Liability Companies
  • Limited Partnerships
  • Private Companies
  • Securities, CDs, Stocks, Bonds, Mutual Funds
  • Joint Ventures
  • Bitcoin
  • Startups
  • Green Energy
  • Farming

Can I choose what type of asset I want to invest in?

Yes. You are in control! It is up to you to do your own due diligence and to ensure you follow IRS rules and regulations.

Are my self-directed IRA investments guaranteed?

No, it is up to you to conduct proper due diligence. Seek the advice of an attorney or a CPA. Check the SEC and FINRA websites for investor fraud alerts. Protect your retirement.

How are self-directed plan assets valued?

Once a year the Custodian of your account will send you a Fair Market Value request form on which you will report the total value of all assets held by your IRA. The IRS requires your Custodian to report this value each year using IRS form 5498. It is your responsibility to obtain the value of the assets owned by your IRA.

Will Easy IRA LLC act as a financial advisor or give me advice regarding my investment choices?

Easy IRA LLC cannot and will not provide any investment, financial, tax or legal advice.

Is it a good idea to seek the assistance of a financial advisor before I make a self-directed investment?

Yes, it is always recommended that you seek assistance of a legal expert, tax advisor or investment professional before entering any investment strategy.
Disclaimer: If tax, legal, accounting, investment, or other similar expert advice is required, the services of a licensed and competent professional should be employed.