The Backstory: A Podcast Moment That Went Viral
A while back, I shared a story on a podcast that sparked hundreds of comments and an avalanche of debate.
I told the story of a young man who used his Roth self-directed IRA to purchase Super Bowl tickets, later selling them at a profit. That profit went back into his Roth IRA—completely tax-free, thanks to the Roth structure.
The audience was captivated… but also confused. The story went viral, and so did the criticism.
Where I Misspoke — And Why I’m Setting the Record Straight
During the podcast, I said, “Buying a sports ticket is real estate.”
Let me be clear: it’s not.
That line traces back to something I heard when I was earning my real estate license in Texas in 1992. One of the instructors made a quip about tickets being like a lease, implying they were real estate. It stuck with me, but that’s not accurate, and I want to acknowledge it publicly.
So, let’s walk through what is accurate—and what really happened with the sports ticket in a self-directed IRA.
What’s Allowed in a Self-Directed IRA or 401(k)?
Self-directed IRAs and Solo 401(k)s can invest in alternative assets—that means things not correlated with the stock market.
This includes:
- Real estate (actual real estate!)
- Private notes
- Syndications
- Precious metals
- Tax liens
- And yes—unique transactions like buying and reselling event tickets
What’s important is that the transaction follows IRS rules, avoids prohibited transactions, and doesn’t fall under collectibles or trigger UBIT.
Was the Ticket a Collectible?
No.
According to the IRS, a collectible includes things like art, rugs, antiques, metals, gems, stamps, coins, and alcoholic beverages. A standard event ticket doesn’t fall into this category.
However, collector tickets, which are designed with commemorative artwork and intended as souvenirs, are treated differently than a basic admission ticket. These are collectibles.
The ticket in our story was simply an entry pass—not memorabilia, not inventory, and not a collectible.
Did This Trigger UBIT?
No.
Unrelated Business Income Tax (UBIT) applies when your IRA earns income from an active trade or business (like a retail store or restaurant), or from leveraged real estate.
In the case I shared, the ticket sale:
- Was not part of a business or recurring activity
- Was a one-time transaction
- Did not involve debt
So, no UBIT was triggered. The gain flowed back into the Roth IRA—tax-free.
What About PSLs and Resale Rights?
Let’s take it a step further.
Some folks brought up Personal Seat Licenses (PSLs)—which can sometimes be resold and may carry longer-term rights or obligations. PSLs are not tickets themselves; rather, they give the holder the right to buy season tickets in specific seats.
These are handled differently and may involve more complex IRS scrutiny. But again, the podcast story had nothing to do with PSLs—it was a simple resale of regular event tickets.
Administrative Feasibility Matters
It’s also important to understand that self-directed IRA custodians and administrators reserve the right to determine what assets are administratively feasible for their platform. That means, even if an investment is technically allowed by the IRS, a self-directed company may choose to accept or decline it based on internal policies, operational logistics, or risk management. This is a business decision, not a legal ruling. So, always check with your provider to ensure the asset you want to invest in is supported.
Final Thoughts
If the story got people talking, that’s a good thing, because it shows just how misunderstood self-directed accounts still are, even among tax professionals.
But let’s be clear:
- The story was real.
- The transaction was compliant.
- The result was tax-free growth in a Roth IRA which is entirely legitimate.
Just don’t call a ticket “real estate.” I won’t either. 😉
Interested in learning more about self-directed IRA strategies?
The professionals at uDirect IRA Services are here to support you every step of the way.
📞 Call us at (866) 919-1219 or visit www.uDirectIRA.com to get started. You can reach us by email at info@uDirectIRA.com
