Alternative Asset Article is a Little Off Base by Dave Owens

Recently, the Wall Street Journal published an article saying “Tax Court Slaps Down IRAs Holding Alternative Assets”.  While technically that was true, it was a very unique circumstance and did not apply to most of the hundreds of thousands of IRA owners that hold alternative assets.  The case revolved around two IRAs that held an “operating company” private stock in their IRA.  These assets are not only unique but very technical to set up.  These assets have always been questionable and looked at by the IRS.  In the last few years they have drawn the ire of the IRS.  There is typically a problem because either they were set up incorrectly or they violated the prohibited transaction rules.  They are also incredibly expensive to set up.

The headline was deceiving.  Alternative assets like real estate, private notes, LLCs, futures and precious metals are the most common types of assets held in IRAs and there is absolutely no problem with holding these alternative assets.   All investors must understand not only the investments they are getting involved with but they also must understand IRC 4975 which covers prohibited transactions and disqualified persons.  Whether you are investing traditional assets like stocks and bonds or alternative assets, all investors should be sure consult a qualified tax or financial professional.

Just clearing things up…

Dave Owens, CPA, CES is owner of AdvantaIRA Trust in Florida. He can be reached at 239-333-1032 x155.  AdvantaIRA Trust is a neutral IRA administrator.

Submitted by:

Theresa Knower, CISP, CES
Chief Operating Officer
AdvantaIRA Trust, LLC
1031 Tax Free Strategies, LLC
1520 Royal Palm Sq. Blvd. #320
Fort Myers, FL 33919
NEED A FORM? Advanta forms at:

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