We Have All The Tools Necessary To Help You

Request A Consultation 646-561-9099 Contact Us For A Complimentary Consultation
View Our Practice Areas

The basics of self-directed IRAs

If you have not heard of a self-directed IRA, you are certainly not alone. Most people who are building wealth through IRAs, use the traditional means (i.e. Roth, Inherited, SEP or SIMPLE). However, most are unfamiliar with the concept of self-directed IRAs and the benefits of having them.

With that, this post will highlight the basics of self-directed IRAs and how they can be beneficial as an estate planning tool. 

For the uninitiated, custodian of the account can unilaterally choose how the funds will be invested. This freedom allows for nearly any type of investment, including real estate, promissory notes and even precious metals. For instance, a self-directed IRA can be used to purchase investment properties, and the proceeds from the sale of such property can be protected through the IRA so that they may grow in a tax deferred manner.

When the custodian reaches retirement, the proceeds can be accessed in the same manner as other qualifying IRAs.

Indeed, a self-directed IRA seems like a no-brainer for some, but following the rules surrounding these vehicles is essential. Rule violations could but one’s investment at risk. As such, investors should be wary of illegal transactions. For instance, a self-directed IRA cannot be used to purchase real estate that is owned by a parent. Essentially, the federal government does not want tax advantaged accounts to be used to facilitate transactions where the parties are closely related so that taxes are unfairly minimized.

If you have questions about how a self-directed IRA can help in your estate plan, an experienced attorney can help.

No Comments

Leave a comment
Comment Information
Email Us For A Response

We Can Help

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Office Address

Busson & Sikorski, PC
381 Park Avenue South
Suite 615
New York, NY 10016-8806

Phone: 646-561-9099
Fax: 646-365-5323
Map & Directions