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Traditional and Roth IRAs can be powerful estate planning tools. With a \u201cself-directed\u201d IRA, you may be able to amp up the benefits of these tools by enabling them to hold alternative investments that offer potentially greater returns.<\/p>\n
However, self-directed IRAs may present pitfalls that can lead to unfavorable tax consequences. Therefore, you need to handle these vehicles with care.<\/p>\n
Alternative investments<\/strong><\/p>\n Unlike traditional IRAs, which typically offer a limited menu of stocks, bonds and mutual funds, self-directed IRAs can hold a variety of alternative investments that may offer the potential to earn higher returns. The investments can include real estate, closely held business interests, commodities and precious metals. Bear in mind that they can\u2019t hold certain assets, including S corporation stock, insurance contracts and collectibles (such as art or coin collections).<\/p>\n From an estate planning perspective, self-directed IRAs have considerable appeal. Imagine transferring real estate or closely held stock with substantial earnings potential to a traditional or Roth IRA and allowing it to grow on a tax-deferred or tax-free basis for the benefit of your heirs.<\/p>\n Risks and tax traps<\/strong><\/p>\n Before taking action, it\u2019s critical to understand the significant risks and tax traps involved with self-directed IRAs. For example:<\/p>\n Proceed with caution<\/strong><\/p>\n If you\u2019re considering a self-directed IRA, determine the types of assets in which you\u2019d like to invest and carefully weigh the potential benefits against the risks. Contact us with any questions.<\/p>\n \u00a9 2024<\/em><\/p>\n <\/body> Traditional and Roth IRAs can be powerful estate planning tools. With a \u201cself-directed\u201d IRA, you may be able to amp up the benefits of these tools by enabling them to hold alternative investments that offer potentially greater returns. However, self-directed IRAs may present pitfalls that can lead to unfavorable tax consequences. Therefore, you need to […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,9,10],"tags":[8,11,12],"class_list":["post-16938","post","type-post","status-publish","format-standard","hentry","category-articles","category-estates","category-news","tag-articles","tag-news","tag-updates"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16938","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=16938"}],"version-history":[{"count":1,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16938\/revisions"}],"predecessor-version":[{"id":16939,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16938\/revisions\/16939"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=16938"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=16938"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=16938"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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