Episode 89: You Can Buy WHAT In Your IRA?! Non-Traditional IRA Investments With Kirk Chisholm

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alternative investments in an ira

The last few episodes, Devin and John have talked about different kinds of investments, including real estate and cryptocurrency. This week, Devin and John interview Kirk Chisholm, of Innovative Advisory Group, on the various types of things you can buy in your Individual Retirement Arrangement (IRA).

Kirk explains that you can buy many types of investments in an IRA, including real estate. Investing in real estate within an LLC is a little different from investing in real estate as an individual. Because the IRA is a designated account with certain tax rules, you have to be sure to avoid anything that is a prohibited transaction. A prohibited transaction is something that is against the rules and it could potentially invalidate the tax status of your IRA.

Thankfully, it’s relatively easy to avoid making prohibited transactions if you understand the rules.

Perhaps the biggest rule is about disqualified persons. A disqualified person is someone your IRA can not do business with – you are a disqualified person with regard to your IRA. You can’t blur the relationship between the IRA and your person. So, you can’t fix your own things, you have to pay a separate person to do everything. Disqualified persons include your spouse, parents, grandparents, kids, and grandkids, but your brothers, sisters, cousins, etc. are not disqualified persons.

Another key piece is that you must keep all the assets within the IRA – you can’t take a distribution from the IRA and buy a property.

There are some tricky rules if you want to purchase a property within your IRA and you want to get a mortgage on that property – you definitely need expert advice if you want to do this.

Your average discount brokers will not be able to handle a self-directed IRA that has non-traditional investments. They aren’t equipped to handle the details, and they don’t have the experience to do it properly. There are now 47 companies that handle alternative assets in IRA accounts – Kirk’s firm has a list at their website. Importantly, these custodians are not allowed to give advice to an investor. If you want to invest in real estate in your IRA, you should hire a professional who specializes in self-directed IRAs.

It’s fascinating to think about these less-common options for investing in your IRAs. They’re not for most people – they’re too complex and you need to be an expert in whatever it is you want to invest.

Highlights include:

  • Owning a horse in your IRA
  • Do you need an LLC in order to invest within your IRA?
  • The few things you can’t buy within an IRA

Resources mentioned in this episode:

The many resources available at Kirk’s firm’s website: InnovativeWealth.com

Kirk has a free gift for you: The Big List of Alternative Investments

The Big Picture Retirement organizer available at BigPictureRetirement.net/getorganized

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