Frequently Asked Questions

No. Mountain West IRA is a passive self-directed IRA administrator. We provide account administration, process transactions at the direction of account owners, maintain account records, and assist with required reporting.

Mountain West IRA does not sell or offer assets for purchase, nor do we select, recommend, endorse, research, evaluate, or perform due diligence on assets. Account owners are responsible for selecting their own assets and conducting their own due diligence.

We do not provide financial, tax, legal, or asset advice.  Consult a qualified professional when guidance is needed.

Mountain West IRA typically processes transaction funding within 3 business days after receiving all required documentation and complete funding instructions.

Processing times may vary depending on the type and complexity of the transaction, documentation requirements, and third parties involved.

Expedited processing may be available for an additional fee on eligible transactions. Contact Mountain West IRA to confirm availability and current fees.

Self-directed IRAs generally receive tax-advantaged treatment, but certain types of income may be subject to additional taxes.

Unrelated Business Income Tax (UBIT): A tax that may apply when an IRA earns income from an active trade or business, such as through certain partnerships or LLCs. UBIT generally becomes a filing consideration when the IRA has $1,000 or more in gross unrelated business income.

Unrelated Debt-Financed Income (UDFI): Income generated from assets purchased or held using borrowed funds. For example, if an IRA purchases real estate using financing, a portion of the property's income or gain may be subject to UBIT under the debt-financed income rules.

Tax Filing Requirements: When applicable, IRS Form 990-T is used to report unrelated business taxable income. The IRA's custodian or trustee is generally responsible for filing the return, although the account owner may need to coordinate the preparation of the necessary tax information and forms.

Because these rules can be complex, consult a qualified tax professional familiar with self-directed IRAs before entering into transactions that may generate UBIT or UDFI.

A self-directed IRA can hold a wide variety of alternative assets, provided the assets and related transactions comply with applicable IRS rules and requirements.

Examples of allowable assets may include:

• Real estate
• Private lending and promissory notes
• Private companies and privately held stock
• Private equity funds
• Partnerships and syndications
• Tax liens and tax deeds
• Certain qualifying precious metals
• Other eligible alternative assets

Certain assets, including life insurance contracts and most collectibles, are prohibited under IRS rules. All assets and transactions must also comply with restrictions involving prohibited transactions and disqualified persons.

Learn More: Visit our Asset Options page to explore the types of alternative assets that may be held in a self-directed IRA.

Self-directed IRAs can hold qualifying real estate, making them an important account option for real estate professionals to understand.

When a client purchases real estate through a self-directed IRA, the transaction involves additional requirements that differ from a traditional property purchase. For example, the IRA must be properly identified as the purchaser, and property-related income and expenses generally must flow through the IRA.

Understanding these requirements can help real estate professionals coordinate more effectively with account owners, title companies, and IRA administrators while avoiding potential transaction delays.

Real estate professionals should also be aware that IRA-owned property cannot be used for personal benefit by the account owner or other disqualified persons.

Yes. Depending on the account types and applicable IRS rules, you may be able to consolidate multiple retirement accounts into one account.

Examples include:

• Traditional and SEP IRAs: May generally be combined into a Traditional IRA.
• SIMPLE IRAs: May generally be transferred to a Traditional IRA after the applicable two-year participation requirement has been met.
• Roth IRAs: Multiple Roth IRAs may be combined into a single Roth IRA.
• Individual 401(k) Plans: Eligible Traditional IRA funds may be rolled into an Individual 401(k) plan if the plan accepts rollovers and applicable requirements are met.

Consolidation options and tax consequences depend on the account types and individual circumstances. Consult a qualified tax professional before initiating a transfer or rollover.

Processing times vary depending on the account type, funding method, and receipt of all required documentation.

Account Establishment: Mountain West IRA will begin processing a new account once the completed application, all required documentation, and the account establishment fee have been received.

Account Funding: The time needed to fund an account depends on the funding method and financial institutions involved. Once funds are received, the following availability requirements apply:

• ACH Transfers and Checks: Funds are subject to a mandatory 5-business-day hold, with no exceptions.
• Incoming Wires: Funds received by wire transfer cannot be sent out until the following business day.

Asset Transactions: Purchasing assets involves separate documentation and processing requirements. Timelines vary depending on the asset type, transaction complexity, and third parties involved.

To help avoid delays, submit complete and accurate documentation and allow sufficient time for funding holds and transaction processing.

Small business owners have several retirement plan options, depending on their business structure, employment situation, and eligibility requirements.

Available options may include:

• Individual 401(k) Plan: Generally designed for self-employed individuals and business owners with no eligible employees other than a spouse.
• SEP IRA: Allows eligible employers to make retirement contributions for themselves and their employees, subject to IRS requirements.
• SIMPLE IRA: Designed for eligible small businesses and allows employee contributions along with required employer contributions.

Each plan has different eligibility requirements, contribution limits, and features.

Learn More: Visit our Self-Directed Account Options page to explore available retirement plans and determine which options you may want to discuss with a qualified tax or financial professional.

• Account Opening Instructions: Follow our step-by-step instructions to open your account.

• Account Opening and Funding Process Diagram: View an overview of the steps involved in opening and funding your account.

• Questions or Need Assistance? Contact our Accounts Department at 208-314-2580 or Accounts@MWIRA.com for assistance with opening and funding your account.

Fees vary depending on the types of assets held and the services required. Mountain West IRA provides detailed fee schedules to help you understand the costs associated with establishing and maintaining your self-directed IRA.

Please review the applicable fee schedule for additional information:

• Fee Schedule
• Precious Metals Fee Schedule

No. You and other disqualified persons cannot live in, vacation at, or otherwise personally use property owned by your self-directed IRA.

Personal use of IRA-owned property is considered a prohibited transaction and can result in significant tax consequences, including the potential loss of the IRA's tax-advantaged status.

Yes. A self-directed IRA may purchase real estate jointly with you or other individuals, provided the ownership arrangement is established at the time of the initial purchase and complies with applicable IRS rules.

Each owner's share of the property's income and expenses must correspond to their ownership percentage. The IRA's portion of all income and expenses must flow through the IRA.

Joint ownership does not eliminate prohibited transaction restrictions. You and other disqualified persons cannot personally use the IRA-owned portion of the property or engage in transactions that violate IRS requirements.

Consult a qualified tax or legal professional before entering into a joint ownership arrangement involving your IRA.

No, your child is considered a disqualified person and this will create a prohibited transaction.

Yes. A self-directed IRA may obtain financing to purchase an eligible asset, provided the loan is structured as non-recourse financing.

Non-recourse financing means the lender's recovery is generally limited to the collateral securing the loan. The IRA owner and other disqualified persons cannot personally guarantee the loan or pledge personal assets as collateral.

Income generated from debt-financed assets may also be subject to Unrelated Business Income Tax (UBIT). Consult a qualified tax professional before using financing to purchase an asset through your IRA.

Generally, no. Paying a company you own to provide construction, property management, or other services for an asset held by your self-directed IRA may constitute a prohibited transaction under IRS rules.

Transactions involving businesses owned or controlled by the IRA owner or other disqualified persons are subject to restrictions intended to prevent personal benefit and conflicts of interest.

Consult a qualified tax or legal professional before entering into transactions involving a business in which you have an ownership interest.

No. Your self-directed IRA cannot purchase property directly from you because you are considered a disqualified person under IRS rules.

Selling, exchanging, or transferring personally owned property to your IRA would constitute a prohibited transaction and could result in significant tax consequences, including the potential loss of the IRA's tax-advantaged status.

When a self-directed IRA purchases real estate, the funds are paid directly from the IRA, and the property is held as an asset of the account. Because the funds are not distributed to you personally, the purchase itself is not considered a taxable distribution.

All income generated by the property, including rental income, must be deposited into the IRA. Property-related expenses, such as taxes, insurance, maintenance, and repairs, must also be paid using IRA funds.

All transactions must comply with applicable IRS rules, including restrictions involving prohibited transactions and disqualified persons.

If your self-directed IRA does not have sufficient funds to purchase real estate, several funding options may be available, depending on your circumstances.

Options may include:

• IRA Contributions: Making additional contributions, subject to IRS eligibility requirements and annual contribution limits.
• Transfers and Rollovers: Moving eligible funds from other retirement accounts into your self-directed IRA.
• Non-Recourse Financing: Obtaining financing that does not require a personal guarantee from the IRA owner or other disqualified persons.
• Joint Ownership: Purchasing property alongside other individuals or entities, with ownership percentages established at the time of purchase.
• Liquidating Existing Assets: Selling other assets held within the IRA to make funds available for the purchase.

All funding methods must comply with applicable IRS requirements, including contribution limits, rollover rules, and prohibited transaction restrictions. Debt-financed real estate may also generate income subject to Unrelated Business Income Tax (UBIT).

Consult a qualified tax or financial professional before selecting a funding method.

A self-directed IRA may hold a variety of real estate assets, provided the property and related transactions comply with applicable IRS rules and requirements.

Examples include:

• Single-family residential properties
• Multi-family residential properties
• Commercial properties
• Vacant land and undeveloped property
• Farmland and agricultural property
• Properties purchased for renovation or resale

Real estate may also be purchased through certain joint ownership arrangements, subject to IRS requirements.

IRA-owned property cannot be used for personal benefit by the account owner or other disqualified persons. Additionally, the account owner and other disqualified persons are generally prohibited from personally performing repairs or improvements on IRA-owned property.

A self-directed IRA may obtain financing through private lenders, financial institutions, or other financing sources that offer non-recourse loans.

Non-recourse financing means the lender's recovery is generally limited to the collateral securing the loan. The IRA owner and other disqualified persons cannot personally guarantee the loan or pledge personal assets as collateral.

Financing may also result in Unrelated Debt-Financed Income (UDFI), which can be subject to Unrelated Business Income Tax (UBIT).

Consult a qualified tax professional before obtaining financing for an IRA-owned property.

You may hire a third-party property manager or oversee certain administrative aspects of your IRA-owned property. However, personally performing repairs, maintenance, improvements, or other services may result in a prohibited transaction under IRS rules.

Property Income and Expenses: All rental income and other property-related income must be deposited into the IRA. Expenses such as property taxes, insurance, repairs, maintenance, utilities, and property management fees must be paid using IRA funds.

Mountain West IRA processes authorized property-related payments at the direction of the account owner. The IRA owner should not personally pay property expenses or receive property income outside the IRA.

Consult a qualified tax or legal professional if you have questions about activities that may constitute prohibited transactions.

As the IRA owner, you are considered a disqualified person under IRS rules. Your self-directed IRA cannot lend money to you or other disqualified persons.

Doing so would constitute a prohibited transaction and could result in significant tax consequences, including the potential loss of the IRA's tax-advantaged status.

Yes. A self-directed IRA may lend money to an eligible borrower purchasing real estate, provided the borrower is not a disqualified person and the transaction complies with applicable IRS rules.

The loan may be secured by real estate or other collateral, or it may be unsecured. Loan terms, including the interest rate, repayment schedule, and any collateral requirements, must be established and properly documented.

All loan payments, including principal and interest, must be made directly to the IRA.

Yes. Two or more self-directed IRAs may participate in the same loan, provided the arrangement complies with applicable IRS rules and prohibited transaction restrictions.

Each IRA's participation percentage must be established when the loan is originated and properly documented. Principal repayments, interest income, and related expenses must be allocated according to each IRA's participation percentage.

All payments must be directed to the participating IRAs according to their respective interests.

A promissory note is a written agreement in which a borrower promises to repay a lender according to established terms. A self-directed IRA may hold eligible promissory notes, which can be secured by collateral or unsecured.

When real estate is used as collateral, the loan may be secured by a deed of trust or mortgage, depending on the transaction and applicable state law.

Loan terms, including the principal amount, interest rate, repayment schedule, and collateral requirements, are established between the parties and documented in the loan agreement.

Mountain West IRA provides administrative and recordkeeping services for eligible promissory note and trust deed assets but does not select, recommend, endorse, or evaluate these assets.

Yes. A self-directed IRA may hold ownership interests in eligible privately held entities, including limited liability companies (LLCs), partnerships, and certain privately held corporations.

These assets and related transactions must comply with applicable IRS rules, including restrictions involving prohibited transactions and disqualified persons. Certain entity structures, such as S corporations, are generally not eligible for IRA ownership.

Mountain West IRA provides administrative and recordkeeping services but does not select, recommend, endorse, evaluate, or perform due diligence on private entities. Account owners are responsible for selecting their assets and conducting their own due diligence.

Private placements are investment offerings that are not publicly offered or traded on traditional stock exchanges. They may include ownership interests in privately held companies, LLCs, partnerships, joint ventures, and private stock.

A self-directed IRA may hold eligible private placement assets, provided the asset and related transactions comply with applicable IRS requirements.

Private placements may involve limited liquidity, transfer restrictions, and other risks. Account owners are responsible for reviewing offering documents, understanding the terms, and conducting their own due diligence.

Mountain West IRA provides administrative and recordkeeping services but does not select, recommend, endorse, or evaluate private placement assets.

A joint venture (JV) is an arrangement between two or more individuals or entities formed to conduct a specific business activity or project.

A joint venture agreement typically outlines each participant's ownership interest, responsibilities, and allocation of income, expenses, profits, and losses.

A self-directed IRA may participate in eligible joint ventures, provided the arrangement complies with applicable IRS rules, including prohibited transaction restrictions.

Account owners are responsible for reviewing the joint venture agreement, understanding the terms, and conducting their own due diligence before directing their IRA to participate.

A Limited Liability Company (LLC) is a business structure that generally provides limited liability protection to its owners while offering flexibility in how the business is managed.

A self-directed IRA may hold ownership interests in eligible LLCs, provided the asset and related transactions comply with applicable IRS rules, including prohibited transaction restrictions.

Annual Requirements: Mountain West IRA requires documentation confirming the LLC remains in good standing and an annual fair market valuation provided by a qualified third party.

Account owners are responsible for reviewing LLC documents, conducting their own due diligence, and ensuring transactions comply with applicable requirements.

A Limited Partnership (LP) is a business structure that generally includes one or more general partners responsible for managing the business and limited partners who typically do not participate in day-to-day management.

A self-directed IRA may hold ownership interests in eligible limited partnerships, provided the asset and related transactions comply with applicable IRS rules.

Potential Tax Implications: Certain partnership activities may generate Unrelated Business Taxable Income (UBTI), which could require the IRA to file IRS Form 990-T and pay applicable taxes.

Account owners are responsible for reviewing partnership documents, understanding potential tax implications, and conducting their own due diligence.

Mountain West IRA provides administrative and recordkeeping services but does not select, recommend, endorse, or evaluate partnership assets.

Private stock represents ownership shares in a privately held company that are not publicly traded on a stock exchange.

A self-directed IRA may hold eligible private stock, provided the asset and related transactions comply with applicable IRS rules. Certain ownership restrictions apply, including limitations involving S corporation stock and prohibited transactions.

Private stock may also be subject to federal and state securities laws, transfer restrictions, and limited liquidity.

Account owners are responsible for reviewing offering documents, understanding applicable restrictions, and conducting their own due diligence.

Mountain West IRA provides administrative and recordkeeping services but does not select, recommend, endorse, or evaluate private stock assets.

Yes. A self-directed IRA may hold certain qualifying precious metals and foreign currency, provided the assets and related transactions comply with applicable IRS requirements.

Eligible precious metals may include certain gold, silver, platinum, and palladium coins or bullion that meet IRS purity and custody requirements. Foreign currency may also be held through eligible arrangements that comply with applicable rules.

Mountain West IRA provides administrative and recordkeeping services for these assets but does not select, recommend, endorse, or evaluate precious metals, currencies, dealers, or vendors.

No. You cannot transfer or sell personally owned precious metals or foreign currency directly to your self-directed IRA.

As the IRA owner, you are considered a disqualified person under IRS rules. Selling or exchanging personally owned assets with your IRA would constitute a prohibited transaction.

IRA contributions generally must be made in cash, and eligible assets must be purchased through the IRA in accordance with applicable requirements.

No. Mountain West IRA is a passive administrator and does not select, recommend, endorse, or promote specific precious metals, currencies, dealers, or vendors.

Account owners are responsible for selecting their assets and dealers, reviewing applicable fees and requirements, and conducting their own due diligence.

Mountain West IRA processes eligible transactions at the direction of account owners.

A self-directed IRA may hold certain qualifying precious metals in the form of coins or bullion, provided they meet applicable IRS requirements.

Eligible metals generally include certain gold, silver, platinum, and palladium products that satisfy IRS purity standards.

Precious metals must be held in accordance with applicable custody and storage requirements. Account owners cannot take personal possession of IRA-owned metals while they remain assets of the IRA.

Storage arrangements and available options may vary depending on the metals and depository selected.

The primary difference is how precious metals are identified and held at the depository.

• Allocated Storage: Specific precious metals are identified and held for the account. When distributed, the same specifically identified metals are generally returned.
• Unallocated Storage: Metals are not individually designated to the account and may be held with other metals of the same type. When distributed, the account generally receives equivalent metals meeting the applicable specifications rather than the exact items originally deposited.

Storage options, fees, and availability vary by depository and asset type. Account owners should review the storage arrangements and terms before purchasing precious metals through their IRA.

A self-directed IRA may hold certain qualifying gold, silver, platinum, and palladium coins or bullion, provided they meet applicable IRS requirements.

Generally, the following minimum purity standards apply:

• Gold: 99.5% purity (.995), with certain exceptions, including American Gold Eagle coins.
• Silver: 99.9% purity (.999).
• Platinum: 99.95% purity (.9995).
• Palladium: 99.95% purity (.9995).

Not all coins and precious metals qualify for IRA ownership. Certain coins and collectibles are prohibited, while qualifying metals must meet applicable IRS purity, custody, and storage requirements.

Account owners are responsible for selecting eligible precious metals and ensuring their purchases comply with applicable requirements.

The account owner selects the depository where their IRA-owned precious metals will be stored, subject to applicable custody and storage requirements.

Mountain West IRA does not select, recommend, endorse, or evaluate precious metals depositories. Account owners are responsible for reviewing storage options, fees, and depository requirements and conducting their own due diligence.

Precious metals held within a self-directed IRA must be stored in accordance with applicable IRS requirements.

Contributions exceeding the applicable annual IRA contribution limit may be subject to a 6% excise tax each year the excess remains uncorrected, subject to IRS rules.

Depending on when the excess contribution is identified, corrective options may include withdrawing the excess contribution and any associated earnings or applying the excess toward a future year's contribution limit, if eligible.

Because correction deadlines and tax consequences vary, consult a qualified tax professional or review current IRS guidance before correcting an excess contribution.

Not necessarily. Self-directed IRAs follow the same general IRS rules as other IRAs of the same type. However, holding alternative assets may involve additional compliance requirements, including prohibited transaction restrictions, asset valuations, and reporting obligations.

The IRS may review retirement account transactions for compliance, particularly when questions arise regarding asset values, prohibited transactions, or required reporting.

Account owners are responsible for ensuring their transactions comply with applicable IRS rules. Mountain West IRA provides administrative and recordkeeping services but does not provide financial, tax, or legal advice.

Consult a qualified tax or legal professional if you have questions about your account's compliance requirements.

Depending on your account activity, the following IRS tax forms may be issued:

• Form 1099-R: Reports distributions taken from your IRA, including certain rollovers and conversions.
• Form 5498: Reports information such as IRA contributions, rollovers, conversions, and the year-end fair market value of your account.

Additional tax forms or filing requirements may apply depending on the assets held and transactions conducted within your self-directed IRA.

For example, certain business or debt-financed income may require IRS Form 990-T to report unrelated business taxable income.

Consult a qualified tax professional for guidance regarding your specific reporting obligations.

Processing times vary depending on the type and complexity of the transaction. Processing begins once Mountain West IRA receives all required documentation and complete funding instructions.

• Straightforward Transactions: Transactions such as promissory notes are typically processed within 3 business days.
• Complex Transactions: Real estate purchases, private entities, and other transactions requiring additional documentation or review may take 3–10 business days.

Processing times may be extended due to incomplete documentation, third-party requirements, or changes to funding instructions.

Funds must also be available for disbursement. ACH deposits and checks are subject to a mandatory 5-business-day hold, while funds received by incoming wire cannot be disbursed until the following business day.

es. Eligible funds from a 401(k), 403(b), Thrift Savings Plan (TSP), or other qualifying retirement plan may generally be rolled into a self-directed IRA.

• Direct Rollovers: Funds are transferred directly from the retirement plan to the receiving IRA. When completed properly and directed to a compatible account type, these transactions generally do not result in immediate taxes or penalties.
• Indirect Rollovers: Funds are paid to you personally and must generally be deposited into an eligible retirement account within 60 days to avoid potential taxes and penalties. Mandatory tax withholding may also apply.

Rollover eligibility and tax treatment depend on the account types, plan provisions, and individual circumstances. Moving pre-tax retirement funds into a Roth IRA generally results in taxable income.

Consult a qualified tax professional before initiating a rollover to understand the applicable requirements and potential tax consequences.

Yes. Engaging in a prohibited transaction can result in significant tax consequences, including the potential loss of your IRA's tax-advantaged status.

If an IRA owner engages in a prohibited transaction, the IRA may be treated as distributed as of the first day of the tax year in which the transaction occurred. This could result in income taxes and additional penalties, depending on the circumstances.

Learn More: Visit our Prohibited Transactions page for additional information about restricted transactions and disqualified persons.

Consult a qualified tax or legal professional if you have questions about a specific transaction.

Yes. You may take a distribution from your self-directed IRA before age 59½. However, the taxable portion of an early distribution is generally subject to income tax and an additional 10% early distribution tax unless an IRS exception applies.

Exceptions may be available for certain circumstances, including qualified higher education expenses, eligible first-time home purchases, qualifying medical expenses, disability, and birth or adoption expenses.

The tax treatment depends on your IRA type, distribution history, and individual circumstances. Roth IRAs and SIMPLE IRAs may have different rules.

Consult a qualified tax professional before requesting an early distribution to understand the potential tax consequences.

A self-directed IRA may make distributions in cash or, in certain circumstances, through an in-kind distribution of an asset held within the account.

An in-kind distribution occurs when an asset, such as real estate or private stock, is transferred from the IRA to the account owner rather than being sold for cash.

The fair market value of the distributed asset is generally used to determine the amount reported for tax purposes. Additional valuation, documentation, and reporting requirements may apply.

Distributions may be subject to income taxes and early distribution penalties, depending on the account type, your age, and individual circumstances.

Consult a qualified tax professional before requesting an in-kind distribution.

The IRS provides exceptions to the additional 10% tax on certain IRA distributions taken before age 59½.

Examples may include:

• Qualified higher education expenses
• Eligible first-time home purchases, subject to a $10,000 lifetime limit
• Certain unreimbursed medical expenses
• Health insurance premiums during qualifying periods of unemployment
• Total and permanent disability
• Qualified birth or adoption expenses
• Certain other exceptions established under IRS rules

Even when an exception applies, the taxable portion of a distribution may still be subject to ordinary income tax.

Different rules may apply to Roth IRAs, SIMPLE IRAs, and other retirement accounts. Consult a qualified tax professional or review current IRS guidance to determine whether an exception applies to your circumstances.

When you pass away, your self-directed IRA generally transfers to your designated beneficiary or beneficiaries, subject to applicable IRS rules and account requirements.

Beneficiaries may be able to maintain eligible alternative assets within an inherited IRA while satisfying required distribution rules.

Available options and distribution requirements depend on several factors, including:

• Beneficiary Type: Different rules apply to spouses, non-spouse beneficiaries, trusts, and certain other beneficiaries.
• Account Type: Traditional and Roth IRAs have different tax treatment and distribution requirements.
• Distribution Requirements: Beneficiaries may be required to take distributions within specific timeframes, depending on their eligibility and circumstances.

Because inherited IRA rules can be complex, beneficiaries should consult a qualified tax or estate planning professional to understand their options and applicable requirements.

Yes. While self-directed IRAs are subject to federal IRS requirements, state laws may also affect certain aspects of your account and the assets it holds.

State-specific considerations may include:

• Tax Treatment: State income tax rules and treatment of retirement account distributions.
• Creditor Protection: Laws governing the protection of IRA assets from certain creditors.
• Inheritance and Estate Laws: State requirements affecting beneficiaries, estates, and inherited assets.
• Asset-Related Requirements: State laws governing real estate ownership, business entities, and other alternative assets.

Because state laws vary, consult a qualified tax or legal professional familiar with the laws applicable to your circumstances.