No, No, No, No….Prohibited Transactions and Disqualified Persons in Self-Directed IRAs
By Anthony Diosdi Since 1974, the IRS has permitted individuals to totally “self-direct” investments made within their Individual Retirement Plans (“IRAs”). Self-directed IRAs are also authorized by federal law and are held by a trustee or custodian that permits investments in a broader range of assets than is permitted by traditional IRAs. See Levine v. Entrust Grp., Inc., 2012 WL 6087399 (N.D. Dec. 6, 2012). Self-directed IRAs allow individuals and small companies to invest in asset classes that are often deemed illiquid. These include but are not limited to tax lien certificates, real estate, livestock, and private companies. Hence, self-directed IRAs allow individuals who prefer to leverage their personal expertise in their investment to do so. Although a self-directed IRA allows individuals to invest in numerous illiquid assets, investments in…