Self Directed IRA Traps and Pitfalls

Self Directed IRA Traps and Pitfalls

A few years ago, esteemed personal finance newsletter Kiplinger published a very negative article on self directed IRAs. The objections raised could be distilled to two key points:

Scams – Kiplinger correctly noted that many unethical promoters, scam artists and fraudsters were preying on self directed IRA holders as easy marks. One notable scam (there are many) Kiplinger cited was a so called “hard money lending” operation.

Tax law complexity – once again, Kiplinger pointed out such complicated pitfalls such as “self dealin,” (which the IRS prohibits – say when an investor uses tax advantaged IRA assets for personal use like a vacation home for personal use)

For investors interested in self directed IRAs, we encourage you to read all of this helpful Kiplinger article, Avoid the Pitfalls of Self-Directed IRAs (January 24, 2012).


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