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Self-Directed IRAs

A self-directed IRA allows you to invest in assets that you know and understand. While most IRA Custodians limit investments to publicly traded securities, funds, or bank CDs/savings accounts, our self-directed IRA program allows you to expand your investment options to include non-publically traded investments. With Colorado National Bank as your IRA custodian you have the freedom to pick and choose from a wide variety of investment options, including, but not limited to:


  • Public stocks and bonds
  • Mutual funds
  • Bank CDs
  • Government securities
  • Public real estate investment trusts (REITs)
  • Public LPs and LLCs
  • Precious metals
  • Real estate (commercial, residential and raw land)
  • Tax Liens
  • Promissory notes
  • Trust deeds and mortgages
  • Hedge Funds
  • Private stock
  • Private real estate investment trusts (REITs)
  • Private LPs and LLCs
  • And more!


Purchasing Non-Publically Traded Investments 

Purchasing non-publically traded investments through an IRA requires special processes and documentation. Please contact us for information on our documentation requirements for each investment type. 


Getting Started

To open a self-directed IRA with Colorado National Bank download either our Traditional IRA or Roth IRA Kits. Click here to go to our Forms section where you can download our IRA Kits.


If you have any questions concerning Colorado National Bank's self-directed IRA services, please Contact Us.


Our Role as an IRA Custodian

Colorado National Bank’s role is limited to serving as your IRA custodian. As custodian, we do not provide investment, tax, or legal advice. In addition, we do not sponsor or endorse any investment; therefore, you are solely responsible for the success or failure of your investment decisions. Colorado National Bank encourages all IRA holders to seek professional advice when investing their IRA funds. 


Transactions to Avoid in a Self-Directed IRA

When selecting investments for your IRA, it is important to understand what limitations may govern your account. There are two types of investment transactions you should avoid: 1) Prohibited Transactions and 2) Prohibited Investments.

1. Prohibited Transactions

Certain transactions involving IRAs are prohibited under Section 4975 of the Internal Revenue Code (“IRC”). A prohibited transaction generally is an improper use of an IRA by the IRA holder or beneficiary, often referred to as a “Disqualified Person.” The prohibited transaction rules are intended to ensure that the assets of an IRA are invested in a manner that benefits the IRA itself (i.e., not the IRA holder), and to prevent a person (or entity) from using the assets of a plan in a self-serving manner.


IRC Sec. 4975 Prohibited Transactions

(A) sale or exchange, or leasing, of any property between a plan (including an IRA) and a disqualified person;

(B) lending of money or other extension of credit between a plan and a disqualified person;

(C) furnishing of goods, services, or facilities between a plan and a disqualified person;

(D) transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a plan;

(E) act by a disqualified person who is a fiduciary whereby he deals with the income or assets of a plan in his own interest or for his own account; or

(F) receipt of any consideration for his own personal account by any disqualified person who is a fiduciary from any party dealing with the plan in connection with a transaction involving the income or assets of the plan.

For the complete list of prohibited transactions, see IRC Section 4975 .

Examples of prohibited IRA transactions include:

  • Personally borrowing money from the IRA
  • Selling, leasing or exchanging property between the IRA holder and the IRA
  • Accepting unreasonable compensation for managing property or assets held by the IRA
  • Using the account as security for a personal loan
  • Personal use of IRA assets


Definition of a Disqualified Persons : For IRA purposes, a disqualified person is defined as the account holder and his or her spouse, lineal descendants, account fiduciaries, trustees, investment managers and advisers; and any corporate entity in which the account holder has at least a 50 percent ownership.

2. Prohibited Investments

Following is a list of what you cannot invest in with an IRA. Virtually everything else is allowed, subject to restrictions imposed by the IRA Custodian. 

  • Collectibles such as artwork, coins, stamps, rugs, antiques, beverages and other personal property
  • S-Corp stock
  • Gemstones and metals (except for certain U.S. coins and bullion which are allowed)
  • Insurance contracts

So long as you follow these few simple rules, you can direct your IRA account the way you see fit – toward the future you envision.

INVEST WISELY – INVESTIGATE BEFORE YOU INVEST 


Investment Products, other than Colorado National Bank’s certificates of deposit, savings, and money market accounts 1) are not deposits, 2) are not insured by the FDIC, 3) are not guaranteed by Colorado National Bank, and 4) may involve investment risk, including the potential loss of principal. 


We highly recommend that you always check out the investment entity before you invest! Click here for a checklist that you can use.

Colorado National Bank supports efforts by various regulatory groups, such as the Securities and Exchange Commission (SEC), the National Association of Securities Dealers (NASD), North American Securities Administrators Association (NASAA), AARP, and others to help investors recognize, avoid and report investment fraud. We strongly urge all clients to get the facts before investing in any investment product. Why is this important? A lack of investment knowledge often creates a susceptibility to fraud among investors. The best deterrent from fraud victimization is through awareness, prevention and education. The following articles and links are provided as a resource to help clients educate themselves before making their investment decisions.

 

Disclosure

Investment Products, other than Colorado National Bank’s certificates of deposit, savings, and money market accounts 1) are not deposits, 2) are not insured by the FDIC, 3) are not guaranteed by Colorado National Bank, and 4) may involve investment risk, including the potential loss of principal.