Self Directed Roth IRAs

[Marvin Meng]

Hi BP-ers!

Recently my REIA hosted a speaker from a firm who write self-directed IRAs. This seems like a valuable tool for investors but when I spoke to my accountant about it she said they could only be opened by individuals below a certain income threshold which I am not (for now anyway... airline pilot).

I'm curious if any of you have experience with this and if so what advice you have about opening one (assuming that's possible for me), and about shopping between companies that service them.

Thank you!

[Brian Eastman]

@Casey Rolland

Was the person you spoke with about partnering between your IRA and yourself an ERISA tax attorney?

Lots of folks like to promote such self-partnering because it creates business for them. It also creates significant risk of disqualifying your IRA if the IRS disagrees with your interpretation.

The real problem with this theory is that there is no specific language in the tax code or significant case law to provide meaningful guidance.  All you have is supposition and interpretation that "if you do this just so..." you will be OK.  

I am personally not a fan of giving the IRS that much control over my destiny.