Holding alternative investments, such as real estate, in a self-directed IRA can help you build retirement funds. However, because these accounts allow for more investment freedom, they are also associated with increased liability. In order to be successful when working within self-directed IRA regulations, due diligence is necessary for investors to limit the risk associated with their retirement investments.
The Entrust Group strives to help investors understand the broad spectrum of alternative investment options, including industry strategies, as well as the benefits of self-directed investing. Additionally, we make it our priority to educate clients about the rules they must follow to protect their savings.
A Self-Directed IRA’s investment options are practically endless, but they’re not without restriction. Per the IRS, your IRA can't invest in collectibles, s corps and life insurances.
A prohibited transaction is any improper use of your retirement account by you, your beneficiary, or any other disqualified person.
An IRA contribution is the dollar amount that an IRA holder (or employer) puts into their IRA. Each type of IRA has an annual IRA contribution limit and date by which the contribution must be made.
Unrelated Business Income Tax (UBIT) is frequent income from a business or trade that is related directly to the purpose of the retirement account. This tax is owed by the IRA and not by the account holder.
An IRA distribution describes a withdrawal of cash and/or assets from an IRA. Distributions can be taken at any time. The type of IRA will determine whether there are tax and penalties associated with distributions.