CHARLOTTE, NC / ACCESSWIRE / February 8, 2021 / Investors who use a Self-Directed IRA have to think carefully about avoiding prohibited transactions. Because these investors have more freedom to invest in alternative asset classes with a Self-Directed IRA-asset classes like real estate, precious metals, tax liens, and private loans-there is also more responsibility to make sure no IRS rules are broken. Doing so could land an investor in trouble, resulting in some assets not having retirement protections at all.
To counter this possibility, American IRA recently released a post detailing rules of thumb investors can use to avoid prohibited transactions within a Self-Directed IRA. The post starts out by detailing what a prohibited transaction is. A prohibited transaction is one that breaks the rules of retirement accounts, such as using an invalid asset (such as art or collectibles like wine) or conducting a transaction within a Self-Directed IRA that yields a personal benefit to the account holder.
This means avoiding transacting with "disqualified persons" within a Self-Directed IRA, as the post notes. Disqualified persons within a Self-Directed IRA refer to those with close or business relationships with the account holder. For example, an investor with a Self-Directed IRA would be expected not to make an IRA loan to a family member, such as a spouse or a son or daughter. To do so would yield a personal benefit to the account holder, which goes against the reason for maintaining separate retirement assets. The IRS is interested in maintaining the integrity of retirement assets with tax protections specifically put aside for future use, not for immediate personal gain.
"These rules of thumb are useful because they help people understand the regulations," said Jim Hitt, CEO of American IRA. "But we also stress to investors that they should know the specific rules that the IRS lays out for all retirement accounts."
The post expands on specific rules of thumb, explaining many of the details that separate retirement accounts from personal accounts. For more information, visit the post at www.AmericanIRA.com. Interest parties may also contact the Self-Directed IRA administration firm by reaching out at 866-7500-IRA.
About:
"American IRA, LLC was established in 2004 by Jim Hitt, CEO in Asheville, NC.
The mission of American IRA is to provide the highest level of customer service in the self-directed retirement industry. Jim Hitt and his team have grown the company to over $400 million in assets under administration by educating the public that their Self-Directed IRA account can invest in a variety of assets such as real estate, private lending, limited liability companies, precious metals, and much more.
As a Self-Directed IRA administrator, they are a neutral third party. They do not make any recommendations to any person or entity associated with investments of any type (including financial representatives, investment promoters or companies, or employees, agents, or representatives associated with these firms). They are not responsible for and are not bound by any statements, representations, warranties, or agreements made by any such person or entity and do not provide any recommendation on the quality, profitability, or reputability of any investment, individual, or company. The term "they" refers to American IRA, located in Asheville and Charlotte, NC and Atlanta, GA."
SOURCE: American IRA, LLC