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PENSCO Blog

Fresh alternative asset insights and the latest news on real estate and private equity investing.

What’s in a Word: “Insert Alternative Asset Here” IRA

  |  By Joseph Adams

Has anyone noticed that lately there seem to be intriguing alternative asset IRA options popping up all over the place?  An internet search for “alternative IRA” yields a whole host of colorful results.  You can invest in property using a “real estate IRA” or hold gold in a “precious metals IRA.”  You can even fund a startup through a new “crowdfunding IRA.”  No matter what your favorite asset type is, it seems like there’s an IRA for that – and if not, it’s probably coming soon.

As compelling as this trend may be, it’s also a little bit confusing.  Because technically, in the eyes of the IRS, there’s no such thing as a “real estate IRA” or a “precious metals IRA.”  Of course, the IRS will distinguish between traditional, Roth, SEP and SIMPLE IRAs, but if you denote a “crowdfunding IRA” on your tax return forms, it would only confuse them.

That’s because the IRS actually says it’s okay for investors to use any IRA to hold alternative assets – including things like property, private equity and commodities.  Some IRA custodians and administrators only allow certain asset types, but their decision to do so is just that – their decision. 

In fact, just as some companies choose to narrow their focus down to select alternative assets (e.g., “Gold IRA”), a much larger portion of big broker dealers won’t allow non-exchange traded alternatives in IRAs at all.  But again, that’s not an IRS rule – that’s a business choice, usually made because they don’t want to deal with the extra paperwork, processes and expertise that are necessary in order to custody alternative assets. 

But here’s the thing - whether you want to use your IRA to invest in a specific alternative asset or to invest in a wide array of assets, you can do both of those things in one place using a PENSCO IRA.  At PENSCO, we skip the gimmicks and just give you the IRA, along with the option to invest in anything allowable by the IRS.  You don’t need a special IRA to invest in  – you just need PENSCO.   

Think of it as a “Choose Your Own Asset" IRA.