Self Directed IRAs

Don’t fence in your IRA. Allow it to roam the entire range of investment possibilities.

Typically, IRA investments are limited to the investment products that an IRA provider sells (stocks, bonds, mutual funds, and CDs). However, with a Self-Directed IRA at Liberty Trust Company you can invest in a wide range of alternative assets.

A Self-Directed IRA is an individual retirement account that gives you complete control over your investment choices and management of your assets. All investment decisions are made by you (the IRA account owner) rather than by a third party. You can choose from a wide range of alternative assets. Self-Directed IRAs are a great opportunity for asset diversification.

Since the introduction of IRAs in 1975, Congress expected that IRAs would not only be Self-Directed, but that they would also be invested in alternative assets.

Your Retirement, Your Choice!

So, how is an IRA with Liberty Trust Company different from any other IRA? The answer is simple. An IRA with Liberty Trust Company may invest in any type of alternative investment that is not prohibited by the Internal Revenue Code.

Almost every type of alternative investment may be purchased through your IRA.

Alternative (Self-Directed) Investments

  • Secured & Unsecured Notes
  • Real Estate (all types)
  • Oil & Gas Investments
  • Private Placements
  • Limited Liability Companies (LLCs)
  • Limited Partnerships (LPs)
  • Private Stock
  • Livestock
  • Wind Rights
  • Timber

For more information, see Alternative Investment Options

Prohibited Investments

The only investments not allowed in IRAs are:

  • Collectibles [IRS Code §408(m)]
  • Life Insurance contracts insuring the life of the account owner [IRS Code §408(a)(3)]
  • S-Corporation stock (Only individuals may own stock in a Subchapter S corporation)

Life settlements are not prohibited investments under IRS Code §408(a)(3). A life settlement is the sale of a life insurance policy to a third party (in this case, the IRA) for a value in excess of the policy’s cash surrender value, but less than its face value, or death benefit. The policy owner receives a cash payment, while the purchaser of the policy (in this case, the IRA) assumes all future premium payments and receives the death benefit upon the death of the insured.

If an IRA invests in collectibles, the amount invested is considered distributed in the year invested. The account owner may have to pay a 10% additional tax on early distributions.

Examples of collectibles include:

  • Artwork
  • Rugs
  • Antiques
  • Metals – there are exceptions for certain kinds of bullion
  • Gems
  • Stamps
  • Coins – there are exceptions for certain coins minted by the U.S. Treasury
  • Alcoholic beverages
  • Certain other tangible personal property

Check Publication 590-B, Individual Retirement Arrangements (IRAs), for more information on collectibles.