Judy’s Comments

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Self Directed IRAs

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Maggie_IRAMaggie Polisano, Principal of CAMA Self Directed IRA, is a third-generation real estate investor, a Certified Trust Specialist (CTS) and a graduate of Villanova University. With an extensive background in investing and development of residential properties in Pennsylvania, New Jersey and Florida, Maggie brings a wealth of knowledge and a track record for highly successful real estate investments to CAMA. Through her expertise in Computer Sciences, prior training as a financial systems consultant, and her systems analyst experience, Maggie assists clients in understanding tax avoidance strategies when dealing with notes, mortgages, options, and other real estate transactions, as well as helping individuals and business owners to select appropriate plans.

What exactly is a self directed IRA and who should be thinking of using one?

A self-directed IRA is an IRA in which the IRA owner directs all investments in the account. There is no legal distinction between a "self-directed IRA" and any other IRA, except with a truly self-directed IRA the account agreement allows the broadest possible spectrum of investments. Self-direction may not be for everyone. It is ideal for those looking to take control of their financial future and invest in both traditional and non-traditional assets that they understand and feel comfortable with.

What are the characteristics of the investor who can benefit the most from opening a self-directed IRA?

A self-directed IRA is truly for the investor who wants to take a more active role in the investment of their retirement funds. Having good information is critical when making investment decisions regarding your retirement plan. The investor who can benefit the most from using a self-directed account is one who is looking for alternatives to the stock market and has an interest and knowledge concerning non-traditional investments.

What are the advantages of establishing a self-directed IRA account?

Some of the key benefits of establishing a self-directed account include:

- Investing in what you understand and can control
- Using your expertise and knowledge to build wealth your way
- True portfolio diversification and asset allocation
- Reduced investment restrictions
- Your financial future is not tied to obscure events
- A reduced dependence on brokers who make a commission on product sales

What might be considered the "cons"of creating a self-directed IRA?

When investing with a self-directed IRA, one must be careful to watch out for violating IRA self-dealing (prohibited transaction) rules. For example, you cannot use your IRA:
- To buy stock or other assets from yourself or sell them to yourself
- To lease assets from yourself or to yourself
- To buy stock in a corporation in which you have a controlling interest
- To lend to yourself or borrow money from yourself
- To engage in transactions with certain related parties and/or family members
Furthermore, you cannot use your IRA to transact with certain disqualified persons. These include you as the owner of the self-directed IRA and other family members such as:
- Your spouse
- Parents
- Your children & their spouses
- Grandparents, grandchildren and great-grandchildren

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Monday, 17 June 2024

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