IRA law does not provide a list of allowable investments, instead, the tax code only mentions prohibited transactions and investments you CAN’t make within an individual retirement account.
This page will provide a short laymans list of restricted investments listed in IRC Section 408 (code for IRA’s) and prohibited transactions listed in Section 4975 (prohibited transactions for various retirement accounts). These rules derive from the official version of the Internal Revenue Code (Title 26) made available to the public by congress at:
- Life Insurance Contracts
- Collectibles defined as:
Any work of art
Any rug or antique
Any metal or gem
Any stamp or coin
Any Alcoholic beverage
- Exceptions for certain coins and bullion
Prohibited Transactions:
Any direct or indirect….
- Sale or exchange, or leasing, of any property between a plan and a disqualified person
- Lending of money or other extension of credit between a plan and a disqualified person
- Furnishing of goods, services, or facilities between a plan and a disqualified person
- Transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a plan
- Act by a disqualified person who is a fiduciary whereby he deals with the income or assets of a plan in his own interests or for his own account
- Receipt of any consideration for his own personal account by any disqualified person who is a fiduciary from any party dealing with the plan in connection with a transaction involving the income or assets of the plan
Disqualified People:
A disqualified person is generally assumed to be the IRA owner directly or indirectly as a family member of the IRA owner. Fiduciaries and entities can also be considered “disqualified” parties. If you are the IRA owner, the people/entities listed below are disqualified people/entities:
- You
- Your ascendants and descendants (i.e. vertical bloodline, mother/father, daughter/son)
- Your spouse or the spouse of your “descendants”
- Fiduciaries to your IRA (i.e. custodian or one who provides services to the IRA)
- Companies owned or controlled 50% or more by the disqualified people listed above
- Note: Spouses of ascendants i.e. stepmother/father, siblings, cousins, uncles/aunts, etc… are not disqualified
Endless Opportunities
Aside from this short list of restrictions above, here’s a longer list of what you CAN do.
Real Estate IRA |
IRA Lending |
Private Investors |
Residential Real Estate | Trust Deeds | Limited Liability Companies |
Commercial Real Estate | Mortgages | Partnerships |
Foreclosure Property | Loan and Mortgage Pools | Private Corporations |
Foreign Real Estate | Private Loans | Joint Ventures |
Raw Land | Private Equity | |
Real Estate Options | Warrants | |
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Asset Backed Paper |
Tax Liens/Deeds |
Offshore Investments |
Account Receivables | Public Tax Sales | Foreign Currency |
Factoring | Private Tax Sales | Forex – Stocks, Bonds, Mutual Funds |
Note Buying | Auctions | Foreign property |
Structured Settlements | ||
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Precious Metals IRA |
Conventional IRA Investments |
Alternative Investments |
Gold IRA | Stocks | Domain Names |
Silver IRA | Bonds | Stock Options |
Platinum IRA | Mutual Funds | Futures Contracts |
Palladium IRA | CDs | Commercial Paper |
Physical Possession | ETFs | Oil and Gas |
or | REITS | Etc… |
Safety Deposit Box | T-Bills |