ASHEVILLE, NC / ACCESSWIRE / July 22, 2020 / Who should not investors transact with when using a Self-Directed IRA to make retirement investments. It turns out there is a very specific definition, according to a recent post at American IRA, a Self-Directed IRA administration firm based in Asheville, North Carolina. American IRA recently took to the company blog to explain the specifics of a “disqualified person” and who that might include.
Why does the IRS outline disqualified persons? Because the purpose of a retirement investment is not to be a personal investment. The tax protections are for long-term growth that occurs within a protected account. For example, someone who owns a Self-Directed IRA and purchases real estate with it wouldn’t be able to use that real estate for a family member rent-free, because it would violate the distinction between personal assets and retirement assets.
In the post, American IRA noted that some of the people who are disqualified persons include the fiduciary of the plan or anyone providing services to the plan, family members of the account holder, and potentially business partners.
The rule of thumb, according to American IRA: it is much easier to transact with strangers. Investors who aren’t sure what to do to avoid a problem of transacting with a disqualified person can also find a detailed breakdown at the IRS website, which explains many of the categories of individuals that may be disqualified.
“The disqualified persons rules can seem tricky at first,” said Jim Hitt, CEO of American IRA, “but in truth they’re actually quite intuitive. As long as investors with a Self-Directed IRA are able to keep their personal relationships distinct from their retirement assets, they shouldn’t run into any problems with these rules.”
Jim Hitt noted that any transaction with a disqualified person and a retirement account can result in a prohibited transaction, which incurs penalties. For investors who are interested in saving as much money as possible and keeping their retirement money efficient, it is far easier to stay away from disqualified persons when it comes to retirement assets.
American IRA, LLC was established in 2004 by Jim Hitt, CEO in Asheville, NC.
The mission of American IRA is to provide the highest level of customer service in the self-directed retirement industry. Jim Hitt and his team have grown the company to over $400 million in assets under administration by educating the public that their Self-Directed IRA account can invest in a variety of assets such as real estate, private lending, limited liability companies, precious metals and much more.
As a Self-Directed IRA administrator, they are a neutral third party. They do not make any recommendations to any person or entity associated with investments of any type (including financial representatives, investment promoters or companies, or employees, agents or representatives associated with these firms). They are not responsible for and are not bound by any statements, representations, warranties or agreements made by any such person or entity and do not provide any recommendation on the quality profitability or reputability of any investment, individual or company. The term “they” refers to American IRA, located in Asheville and Charlotte, NC and Atlanta, GA.”
SOURCE: American IRA, LLC
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