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URL:  https://boards.fool.com/madbrain-quotwhat-things-are-you-forbidden-to-29003276.aspx

Subject:  Re: Retirement savings options for high-income e Date:  1/4/2011  8:15 PM
Author:  JAFO31 Number:  68071 of 96162

madbrain: "What things are you forbidden to invest in IRAs?"

"Investment in Collectibles:

If your traditional IRA invests in collectibles, the amount invested is considered distributed to you in the year invested. You may have to pay the 10% additional tax on early distributions, discussed later.

Collectibles. These include:

Artworks,

Rugs,

Antiques,

Metals,

Gems,

Stamps,

Coins,

Alcoholic beverages, and

Certain other tangible personal property.

Exception. Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department. It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion."

http://www.irs.gov/publications/p590/ch01.html#en_US_publink...

And to invest directlyin real estate, you need to find a trustee who will allow it, have an IRA big enough to cover costs, and avoid all prohibitted transactions.

"Prohibited Transactions:

Generally, a prohibited transaction is any improper use of your traditional IRA account or annuity by you, your beneficiary, or any disqualified person.

Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendant, and any spouse of a lineal descendant).

The following are examples of prohibited transactions with a traditional IRA.

Borrowing money from it.

Selling property to it.

Receiving unreasonable compensation for managing it.

Using it as security for a loan.

Buying property for personal use (present or future) with IRA funds.


Fiduciary. For these purposes, a fiduciary includes anyone who does any of the following.

Exercises any discretionary authority or discretionary control in managing your IRA or exercises any authority or control in managing or disposing of its assets.

Provides investment advice to your IRA for a fee, or has any authority or responsibility to do so.

Has any discretionary authority or discretionary responsibility in administering your IRA."

Id.

Regards, JAFO

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