Tax Relief – Investment From Self-Directed IRA Accounts
It is a good idea to use your self-directed IRA account to make investments in tax lien certificates in addition as tax deeds for tax relief. You can make your money grow by such tax-free investments. The tax relief continues until you make withdrawals from your account after retiring.
Some brokerages claim their accounts to be self-directed accounts, but are truly not so. This is because your investment is restricted to the instruments in which they deal. There is no such restriction in an account which is truly self-directed. You can make investments in real estate except tax lien certificates, deeds, and notes. In fact, you can invest in any asset the law permits.
The companies that provide true self-directed IRA accounts are not allowed to sell any investments to you, but they can advise you and do the paperwork. Simply, they can not broker your investment or charge commission. There are not many such companies, but they exist and it is best to have your accounts with them.
If you presently have a regular IRA account, you can move it to a self-directed IRA. The company you are switching to will help you with the paperwork and other formalities. However, if you have a 401 account or an IRA account, you can not move the funds to a self-directed account unless you have left the company with which your account was set up.
Are there any expenses associated with the change over? Yes, of course. But the fees charged by self-directed IRAs bear no comparison with the tax relief you are able to get on your investments made out of such funds.