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Can you really invest in almost anything?

Estimated reading time: 1 minutes, 55 seconds

As we mention elsewhere on our website, the Internal Revenue Code (IRC) explains that IRA holders may not invest in life insurance, collectibles or stock in an S corporation. With those exceptions, you are able to invest in just about anything with a Kingdom Trust Self-Directed IRA.

Many don’t realize that some potential alternative assets may in fact be right under their noses, involving assets they are already interested in and passionate about.

Some of the more popular alternative assets besides those we mention frequently on our site include the following:

  • Equipment in an IRALivestock –Some Self-Directed IRA investors hold cattle because of tax-advantaged returns from dairy production and sales. Others invest in prized bulls so that their IRA might benefit from bull semen or the sale of offspring.
  • Equipment – Some businesses can’t afford to purchase expensive equipment outright, so investors may purchase the equipment with Self-Directed IRA accounts and lease them to businesses, with the income going right back into the retirement accounts.
  • Farmland – By Racehorses in an IRApurchasing farmland with an IRA, planting on it and harvesting the land, investors may produce tax-advantaged income in their IRAs.
  • Water – Some investors are using Private Equity IRAs to purchase shares of water infrastructure companies in the hopes that their IRA might benefit from the increasing demand for clean and reliable water sources.
  • Horses – Some investors use retirement funds to purchase racehorses, selling them for profit down the road after a bevy of strong finishes. As with livestock, one might purchase a prized racehorse so that the IRA might benefit from funds received from the sale of its offspring.

As with all such investments, the IRA holder must not benefit from any transaction made with retirement funds. This could result in a prohibited transaction, which may disqualify the account. For more information on prohibited transactions, please download our free report on the topic. You can also view the IRS webpage on prohibited transactions. Only your IRA account should benefit from any transaction made with account assets or funds.

If you have questions about a potential alternative investment option in your Self-Directed IRA, contact Kingdom Trust today. While we are unable to give investment advice, we can let you know if an investment is feasible in your account type and if it is one Kingdom Trust can hold on its platform.

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