PPA '06 Makes IRA Rollovers More Attractive: Maybe it's Time to Switch to a Self Direct IRA? Think Again!

Abstract:     
Federal legislation passed in 2006 affords participants and beneficiaries of eligible retirement benefits new distribution options that can result in the reduction or deferral of federal income taxes. These new distribution options may have the domino effect of making rollovers to IRAs a more desirable funding vehicle. If this occurs, the continued interest in self-directed IRAs (i.e., where the IRA owner is not limited to the IRA trustee's or custodian's investment options, but instead can choose his investment options) will become increasingly marketed by custodians. Self-directed IRA owners appear to be particularly interested in real estate investments. In a two-part article, the first part explores the new benefit distribution options, whereas the second part discusses the practical and legal issues that IRA owners should consider before making self-directed investment decisions, especially with respect to real estate investments.

Accepted Paper Series