Self-Directed IRAs and Solo 401(k)s have been around a long time – nearly 50 years!  Still, being able to invest outside of Wall Street into alternative assets is still somewhat of a best-kept secret.  Here are the top 10 questions we are asked here at uDirect IRA Services:

  1. What restrictions exist for Self-Directed IRAs? Self-Directed IRAs are governed by prohibited transaction rules, which primarily restrict transactions with disqualified persons, such as the account owner, their spouse, children, parents, and certain business partners.
  2. Can my Self-Directed IRA invest in my personal business or company? No, this would violate the prohibited transaction rules.
  3. What is a checkbook-control IRA or IRA/LLC? An IRA/LLC is a special type of LLC where an IRA invests its cash into a newly created LLC, managed by the IRA owner. Read about it HERE.
  4. Can a Self-Directed IRA invest in cash and get a loan for real estate? Yes, an IRA can buy real estate using its cash and a non-recourse loan.
  5. Are there tax traps in Self-Directed IRAs? What about UBIT/UBTI? The UBIT tax applies when an IRA receives “unrelated business income.” However, certain types of income like real estate rental income, interest income, capital gain income, dividend income, and royalty income are exempt from UBIT. We have an article that you may find helpful HERE.
  6. What types of investment assets are prohibited in a Self-Directed IRA? Prohibited assets include collectibles, life insurance, S-corporation stock, and investments that constitute a prohibited transaction.
  7. What are popular self-directed retirement investments? Popular assets include real estate & rental properties, secured loans for real estate, private small business stock or LLC interest, and precious metals like gold or silver.
  8. Can I live in or work on a house owned by my IRA? No, disqualified persons, including the IRA owner, cannot use or benefit from the property.
  9. Can my account invest with other partners? Yes, but it’s important to consult legal counsel due to rules surrounding prohibited transactions and disqualified persons.  Call uDirect to learn more at (866) 447-6598.
  10. What is a Prohibited Transaction and who are disqualified persons? A prohibited transaction is an improper use of the IRA account involving disqualified persons like the account owner, family members, and entities controlled by these individuals.

uDirect IRA Services, LLC is not a fiduciary and does not offer investment advice.  To schedule a consultation on the rules of self-directed accounts, please reach out to us at  To open an account, start HERE.