What are the prohibited transactions?

IRA Prohibited Transactions

The IRA LLC And Adhering To The IRA Rules:

The IRA LLC with checkbook control gives you ultimate investment freedom without the traditional limitations and onerous fees levied by your IRA custodian.

With a New Standard IRA (IRA LLC), you can invest how and when you want. However, some restrictions do apply, which are outlined in the IRS code.

The IRS restricts what assets you can invest in, who can you invest and do business with and under what circumstances you may do so.

For education purposes, we will list the IRA rules below. Note: IRA rules are subject to change, so as a fail-safe, always refer to the IRS website or a competent tax professional familiar with IRAs before you make an investment.

Investor Be Aware!

IRA Custodian Restrictions vs. IRS Restrictions

Your IRA custodian may impose investment restrictions that go beyond the IRS rules.

Note: By law, self-directed IRA custodians can impose even greater restrictions on what you can’t invest in with your IRA than the IRS, which is why the topic of IRA-prohibited transactions often gets muddied.

The additional asset restrictions combined with the excessive custodial fees are often the primary reasons why investors choose to form an IRA LLC. Perhaps, you are considering an IRA LLC for yourself for the same reasons.

For example, an IRA custodian may prohibit you from investing in cryptocurrency, even though cryptocurrency is not explicitly listed as a restrictive asset under the IRS rules on IRAs.

With an IRA LLC, you are truly self-directed; the only restrictions placed on an IRA LLC are those that apply to IRAs generally, which are outlined below.

If you have questions about selecting the right IRA custodian or want assistance setting up your IRA LLC the right way, the first time, without the hassle of figuring it out on your own, don’t hesitate to contact us.

Would You Like To Set Up An IRA LLC? 

Download our in-house IRA LLC checklist for free to create IRA LLCs for our clients. You will also receive a sample IRA LLC operating agreement to review. 

know the rules!

Restricted IRA investments:

Before Investing in a self-directed IRA, you must know some basic IRA Rules.

Below is a short list of restricted assets, which are defined in IRC Section 408 (code for IRAs) and prohibited transactions defined in IRC Section 4975 (code for prohibited IRA transactions).

Note: The IRS does not tell what you can invest in, but rather what you cannot invest in with your IRA. Therefore, if the IRS does not explicitly prohibit you from purchasing a particular asset, you are safe to assume that you are free to do so.

To comply with these IRA rules, refer to the official versions of the Internal Revenue Code (Title 26) published on www.uscode.house.gov by Congress.

Restricted IRA investments include:

Prohibited IRA Transactions Include:

Any direct or indirect...

IRA Disqualified Parties:

A disqualified person is an IRA Participant or anyone considered an IRA Participant.

If you are an IRA Participant, the people or entities listed below are disqualified:

(Note: Spouses of ascendants, for example, your stepmother, stepfather, and your siblings, are not considered disqualified parties!)

Allowed IRA Investments:

Aside from the short list of restrictions outlined above, here’s a list of assets you may invest in with your self directed IRA LLC.

Are you interested in alternative investment opportunities? We may be able to match you with the perfect investment opportunity for your IRA portfolio.

Review the charts below! The alternative investing opportunities are virtually endless!

List Of Allowable IRA Investments:

Real Estate IRA
IRA Lending
Private Investors
Residential Real Estate
Trust Deeds
Limited Liability Companies
Commercial Real Estate
Foreclosure Property
Loan and Mortgage Pools
Private Corporations
Foreclosure Property
Private Loans
Joint Ventures
Foreign Real Estate
Private Equity
Foreign Real Estate
Asset-Backed Paper
Tax Liens/Deeds
Offshore Investments
Account Receivables
Public Tax Sales
Foreign Currency
Private Tax Sales
Forex stocks, Bonds, and Mutual Funds
Note Buying
Foreign property
Structured Settlements
Precious Metals IRA
Conventional Assets
Alternative Investments
Gold IRA
Domain Names
Stock Options
Silver IRA
Mutual Funds
Futures Contracts
Platinum IRA
Commercial Paper
Palladium IRA
Oil and Gas etc.
Physical Possession
or Safety Deposit Box
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