Frequently Asked Questions

Explore questions and answers from the experts at Mountain West IRA.

General

How do I determine which retirement plan is best for me?

You can review our Retirement Plans section for more information regarding plan types and contribution comparisons. You should also seek the services of a tax professional to assist you in the proper selection of the plan best suited for you.

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What are required minimum distributions (RMD)?

Required minimum distributions (RMD) are the minimum amounts that must be distributed to you from your retirement account(s) after you reach age 73 (with the exception of the Roth IRA).

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What are the limits to the investments I can make?

You cannot invest in Collectibles or Life Insurance Contracts. There are also certain transactions in which you cannot participate when using IRA funds. These transactions are referred to as “prohibited transactions“. Prohibited Transactions are defined in IRC § 4975(c)(1) and IRS Publication 590. These transactions were established to maintain that everything the IRA engages in is for the exclusive benefit of the retirement plan.

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What are the potential benefits of a self-directed IRA?

You are able to invest your tax-advantaged retirement dollars in investments you know and understand. Through the power of compounding interest, this has the potential to create lasting wealth for you and your family.

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What type of service does Mountain West IRA provide?

Mountain West IRA is a retirement plan record keeper for self-directed IRAs. We offer the same retirement plans as other plan administrators with one exception – we walk you through and explain the process of how to purchase the investments that you choose with your IRA funds.

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What types of IRAs can be self-directed?

We offer a variety of types of IRAs including Traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, Health Savings Account (HSA), Individual 401(K) Plan/Solo(K) Plan, and Record Keeping Account.

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Where do I find more information on your education?

To learn more about Mountain West IRA’s educational events and tools.

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Why do I need an administrator like Mountain West IRA?

The Internal Revenue Service requires a custodian to hold the IRA assets and the custodian is required to report transactions on the account.

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What is a self-directed IRA

Are there a lot of people who have self-directed IRA accounts?

The self-directed industry is growing very strong with trillions of dollars invested in IRAs that are non-traditional assets.

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Are there different tax rules for self-directed IRAs?

The unique thing with IRAs and 401(k) are the tax advantages.

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Is it legal to purchase non-traditional assets using my IRA?

The answer is yes! The Employee Retirement Income Security Act (ERISA) of 1974 passed the responsibility of retirement saving from the employer to the employee.

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My (CPA/attorney/broker/friend/other person) said that buying and selling real estate in my self-directed retirement plan was illegal. Why?

This has been a long-lived myth. Neither the IRS nor the Department of Labor has ever published a list of legal investments.

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What is a prohibited transaction?

There are some transactions that are prohibited by the Department of Labor ERISA division and the IRS.

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What is a self-directed IRA vs a regular IRA?

There is no legal distinction between a “Self-Directed IRA” and any other IRA. The difference is Mountain West IRA lets you take control of your retirement by letting you invest your IRA in what you know and understand best.

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Why haven’t I heard about this?

It’s a common misconception that the only investments allowed in a retirement account are stocks, CDs, and mutual funds.

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Allowable Investments - General

As a real estate professional, why should I know about self-directed IRAs?

Investors, you can invest in something you know and understand which means you will be able to grow your retirement much more efficiently compared to traditional methods.

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Can I borrow money from my IRA?

You may not borrow funds personally from your IRA under any circumstances. This is a prohibited transaction. You may lend to any person other than disqualified persons or companies.

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Can my IRA be sued?

Your IRA may be subject to legal action. Individual retirement accounts (IRAs) are not always exempt from creditor claims, and are never exempt from federal or state taxing authorities; however, most states do not permit creditors to collect from IRAs.

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Does Mountain West IRA have a financial advisor or investments to offer?

No, Mountain West IRA is a passive, self-directed IRA administrator of your account, preparing account statements for you and reports for the IRS.

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How fast can Mountain West IRA fund a transaction?

Mountain West IRA funds most transactions within 3 business days of receiving completed documents. We do have the ability to expedite and fund within 24 hours for a $95 expedite fee.

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What can I invest in?

You may invest in anything which is not prohibited or collectible as defined by the Internal Revenue code.

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What is Unrelated Business Income Tax (UBIT) and Unrelated Debt Financed Income Tax (UDFI)?

UBIT comes in two forms. Unrelated Business Income Tax (UBIT) and Unrelated Debt Financed Income Tax (UDFI).

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Start Investing In a self-directed iRA

Can I consolidate my IRA accounts?

Yes. You can consolidate your IRA accounts.

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How do I open a self-directed IRA?

Learn more using our step-by-step instructions.

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How long does it take to establish an IRA?

Mountain West IRA has a 3 business day turnaround time for account establishment and transactions upon receiving completed documents.

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I own a small business. Can I offer a self-directed IRA to my employees?

If you have no common-law employees, you can offer an Individual 401(K) Plan.

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What are the fees and costs involved with my self-directed IRA?

For a list of our fees, please see our Self-Directed IRA Fee Schedule this is also included in our IRA Starter Kit.

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Real Estate

What if I don’t have enough cash to buy real estate in my IRA?

You may partner with yourself or others; you may make allowable contributions; you may obtain debt financing through private sources or financial institutions on a non-recourse basis.

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Can I personally partner with my IRA to purchase real estate?

Yes, as long as it is a new purchase and the percentages are determined upon the purchase of the property. All rules associated with the IRA owning the property 100% still apply for partially owned.

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Can I purchase a house and personally live in it?

No, that is considered a prohibited transaction.

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Can I purchase an investment property I already own?

No, a property your IRA is purchasing must be a new purchase. You are a disqualified person, so your IRA cannot purchase from you as this creates a prohibited transaction.

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Can I purchase an investment property for my child to live in, but the roommates pay rent?

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

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Can my IRA take a loan to enhance the purchasing power of the IRA?

Yes the IRA can. However, the loan must be a non-recourse, which means no personal guarantee by the IRA holder or any other disqualified persons.

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How does an IRA purchase real estate without taking a distribution?

When using your IRA for the purposes of purchasing real estate, you are not actually taking a distribution.

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I own a construction company or property management company, can my IRA pay my company to do the construction or property management?

No, you are a disqualified person, thus this will create a prohibited transaction.

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What real estate purchases can be made with an IRA?

Read more about Real Estate in your IRA.

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Where can I get a loan for real estate purchases using my IRA?

Normally private lenders, seller carry backs, and mortgage companies may lend to your IRA on a non-recourse basis. Sometimes banks and credit unions may make non-recourse portfolio loans to IRAs. Please contact us for more details.

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Who manages the property when my IRA owns it?

You can choose to hire a property management company or you can personally manage. However, if you choose to personally manage you cannot do any “sweat equity” (ex: do any repairs) all repairs must be hired to a third party.

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Promissory Note

Can my IRA make loans to others who want to purchase real estate?

Yes, as long as they are not a disqualified person. Your promissory note can be secured or unsecured. You and the person you are loaning to will determine the terms.

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Can I loan myself money from my IRA?

No, you are considered a disqualified person.

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Can I partner with another IRA to loan money?

Yes, as long as upon creation of the note each percentage is determined.

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Why invest in promissory notes trust deeds?

When you turn to a self-directed IRA company that allows for trust deed investments like Mountain West IRA, you can take advantage of loans secured by real estate, other tangible property, or even unsecured loans.

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Private Entities

How do I find a private entity to invest in?

Often you are invited to be an investor, work within the company or know someone who works at the company, or you find a private entity via research. Mountain West IRA is a passing self-directed IRA administrator who does not do due diligence on private entities.

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What are Limited Liability Companies (LLCs)?

An LLC is a legal organization that provides the advantages of a partnership while limiting legal liability of the individual partners the same way a corporation does.

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What are joint ventures?

Private or closed corporation stock offerings are not available to the public on the open market.

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What are private placement investments?

Private placements such as LLCs, Partnerships & Joint Ventures, and Private Stock are just some of the many options available with a Mountain West IRA self-directed individual retirement account.

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What is a Partnership (LP)?

A partnership is a type of unincorporated business organization or agreement in which multiple individuals, called general partners, manage the business and are equally liable for the debts of the business.

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What is private stock?

Private or closed corporation stock offerings are not available to the public on the open market.

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Precious Metal, Foreign Currency

Can I put precious metals or foreign currency that I currently own into my IRA?

No, this is considered a prohibited transaction because you are a disqualified person.

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Does Mountain West IRA choose the dealer?

No, as the IRA holder, you get to choose the dealer and the type of product you want. Mountain West IRA does not sell or promote any products or vendors.

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What are the different forms in which precious metals can be held in a Mountain West IRA?

Precious metals can be held in your IRA in the form of physical (allocated or unallocated) gold and silver bullion, coins from specified countries, and certificates.

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What is the difference between allocated and unallocated storage?

Allocated or segregated storage only applies to gold bars 10 oz. or greater and it ensures that the bars are kept separate from the other metals in the depository’s vault.

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What types of metals are allowed in an IRA?

An IRA allows gold bars, gold coins, sliver coins and bars, platinum/palladium bars and coins, and currency.

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Who chooses the depository?

Unlike most self-directed IRA administrators, Mountain West IRA allows you as the IRA holder to choose any precious metals storage facility. The choice is up to you. Please do your due diligence on the depository you choose.

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Why precious metals/foreign currency in your retirement account?

When it comes to investing in your future, a precious metals self-directed IRA can diversify your retirement portfolio.

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