Most people invest IRA money in stocks, bonds, funds, and bank accounts. However, you don’t have to use such vehicles. Under the tax code, you can invest IRA money in anything except:
* Life insurance.
* Collectibles.
* Shares of S corporations.
Therefore, if you have a lot of knowledge about a certain topic, you might invest accordingly. You could buy rental property for your IRA, for example, if you are an experienced real estate investor and you know of an area with low prices and great potential.
If you do go beyond the norm in your IRA investments, proceed cautiously. There are rules concerning what you can’t do with IRA investments, even legitimate ones. You can’t sell property to your IRA, for instance, and you can’t buy property from your IRA. You’ll owe tax and penalties if you do, and your IRA can be terminated.
To make unusual investments in your IRA, you’ll have to find a custodian who permits so-called "self-directed IRAs." That custodian, or the company that administers the self-directed IRAs, should be able to help you avoid breaking the rules.