Self-directed IRAsThese companies let you invest in more than stocks and mutual fund that others do.
What you can invest in includes:
While you do have a larger selection, there are still some limits on what you can invest in. Internal Revenue Code clearly states that you may not use IRA funds to invest in collectibles such as:
There are also transactions you are not allowed to do: "Generally a prohibited transaction is any improper use of your IRA account or annuity by you, your beneficiary or any disqualified person. Examples of disqualified persons include your fiduciary* and members of your family (spouse, ancestor, lineal descendents, and any spouse of a linear descendent." (Source: Internal Revenue Code/IRS Publication 590) "For these purposes a fiduciary includes anyone who does any of the following."
The following are examples of prohibited transactions within a IRA.
While you may certainly do business with the aforementioned "disqualified persons" outside your IRA, within your IRA you may not buy or sell ("Transactions") to family members, fiduciaries and, most importantly yourself. It is very important to remember that you and your IRA are distinctly separate entities. For example if you owned a piece of property and you wished to sell it to your own IRA, this would be considered a prohibited transaction (commonly referred to as self-dealing). However if you did not own the piece of property then your IRA could purchase it as an investment.