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March 19, 2024

Can I Put a Cow in My IRA? Welcome to The Wild West of The IRA.

A Self-Directed IRAs offer a broader range of investment options compared to a Traditional IRA.

These are examples of assets that you can hold in a Self-Directed IRA:

  1. Real Estate: You can invest in various types of properties, such as residential homes, commercial buildings, apartment  complexes, and even vacant land. You can also invest in real estate-related ventures like mortgage notes and tax lien certificates.
  2. Private Equity: You can invest in private businesses,  startups, or limited partnerships that are not publicly traded  on stock exchanges. This allows you to potentially capitalize  on the growth of small businesses and innovative ideas.
  3. Precious Metals: You can hold certain types of physical gold, silver, platinum, and palladium in your Self-Directed IRA, provided they meet the IRS purity standards.
  4. Cryptocurrencies: You can invest in digital currencies like  Bitcoin, Ethereum, and other popular cryptocurrencies within a Self-Directed IRA.
  5. Peer-to-Peer Lending: You can participate in lending platforms that connect individual borrowers and lenders, allowing you to potentially earn interest on loans you provide to others.
  6. Crowdfunding: You can invest in crowdfunding opportunities, where you contribute money to support businesses, real estate projects, or other ventures in exchange for equity or  debt.
  7. Hard Money Lending: You can provide short-term, high-interest loans to real estate investors, typically secured by the property being purchased.
  8. Private REITs: You can invest in private Real Estate Investment Trusts (REITs) that are not traded on public stock exchanges, providing exposure to real estate assets without direct property ownership.

However SDIRA’s are not limited to just these here are a few

  1. Livestock: Some investors have used their SDIRAs to invest  in cattle, horses, or other livestock. This investment can  generate income through breeding, selling, or leasing the  animals.
  2. Taxidermy: While it might sound unusual, some SDIRA  investors have invested in taxidermy collections as a form of art or collectible, hoping to profit from their appreciation in value over time.
  3. Fine Art: Investors with a keen eye for art may choose to invest in paintings, sculptures, or other forms of fine art through their SDIRA, hoping that the pieces will increase in  value over time.
  4. Intellectual Property: Some investors may use their SDIRA to acquire patents, copyrights, or trademarks, aiming to generate income from licensing fees, royalties, or by selling the intellectual property rights to other parties.
  5. Mineral Rights: Investors can purchase mineral rights to land, which grants them the right to explore, extract, and profit from the natural resources found beneath the  property’s surface, such as oil, gas, coal, or precious metals.
  6. Timberland: Some investors buy forested land with the expectation of generating income from the sale of timber, as well as the potential appreciation of the land value.
  7. Water Rights: In areas where water is scarce, investors can purchase water rights, giving them the legal right to use or sell the water from a specific source, such as a river or aquifer.
  8. Domain Names: Some SDIRA investors may invest in domain names, hoping to profit from their appreciation in value or by leasing or selling them to other parties.
  9. Collectibles: While the IRS generally prohibits investing in collectibles within an IRA, some exceptions exist for specific types of coins and precious metals. For example, certain gold, silver, platinum, and palladium coins that meet purity standards can be held in an SDIRA.

In contrast, a Traditional IRA typically allows investments in traditional assets like stocks, bonds, mutual funds, and certificates of deposit (CDs). The expanded investment options in a Self- Directed IRA offer greater opportunities with significantly more risk. It is important to remember in any IRA the special tax treatment does not allow for capturing losses, so when an investor loses everything in an ultra-risky self directed IRA asset, they can not take the loss on their tax filings.

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