September 2, 2025 • 33 mins
In this episode of the Teaching Tax Flow podcast, hosts Chris Picciurro, CPA, and John Tripolsky welcome back Scott Maurer, VP at Advanta IRA, to take a deep dive into the world of self-directed IRAs.
Many investors don’t realize that retirement funds can be used for much more than just stocks and mutual funds. Scott breaks down how self-directed IRAs open the door to real estate, private lending, startups, precious metals, and even cryptocurrency — all while maintaining tax advantages.
The conversation explores how these accounts work, what you can and can’t invest in, compliance requirements, and practical strategies for combining traditional IRAs with self-directed ones. Whether you’re an investor seeking greater control or a tax pro advising clients, this episode uncovers strategies that can maximize retirement wealth.
What You’ll Learn:
• What self-directed IRAs are — and what they are not
• How to diversify retirement funds into real estate, private companies, and more
• The rules for disqualified persons and prohibited transactions
• The difference between custodial and checkbook IRAs
• How to plan ahead for RMDs with illiquid assets
• Practical compliance requirements and why custodians matter
Key Insights:
Self-directed IRAs give investors control and flexibility, but with that freedom comes responsibility. From avoiding prohibited transactions to balancing liquidity for RMDs, Scott explains why working with a knowledgeable custodian is essential for both compliance and strategy.
Notable Quotes:
• “Most people don’t know it’s possible to invest in real estate or startups with their IRA — because their brokerage won’t tell them.” – Scott Maurer
• “Your IRA cannot transact with or benefit a disqualified person. That’s critical to know.” – Scott Maurer
• “Control is the number one benefit of a self-directed IRA.” – John Tripolsky
• “Ideas are cheap — implementation and compliance are what make the difference.” – Chris Picciurro
Resources:
• Join the Community: DefeatingTaxes.com
• Sunsets & Dinks Pickleball Apparel – teachingtaxflow.com/pickleball (Use code TTF15)
- (00:00) - Exploring Self-Directed IRAs and Pickleball Enthusiasm
- (01:59) - Exploring Self-Directed IRAs with Scott Maurer of Advanta IRA
- (06:13) - Exploring Self-Directed IRAs for Diverse Investment Opportunities
- (14:23) - Exploring Investment Opportunities in Self-Directed Retirement Accounts
- (19:03) - Navigating IRA Rules and Disqualified Persons in Investments
- (20:43) - Impact of Technology on Self-Directed Investments and Opportunities
- (24:26) - Navigating Self-Directed IRAs and Custodial Requirements
- (30:49) - Exploring Tax Strategies and Upcoming Content on YouTube
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
John Tripolsky (00:03):
Hey, everybody, and welcome back to the teaching
tax flow podcast episode 151today. We are jumping into those
self directed IRAs. We're gonnadive deep into them, explain
what they are, maybe whatthey're not as well with a great
guest. But as always, let's takea brief moment and thank our
episode sponsor.
Ad Read (00:26):
Hi. Chris Picciurro here, founder of Teaching Tax
Flow, cohost of the Teaching TaxFlow podcast and pickleball
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John Tripolsky (01:25):
Hey, everybody, and welcome back to the teaching
tax flow podcast. We know thatyou know what you're doing here
because, obviously, we have thebest content out there. Just
kidding. There's a lot of greatcontent out there. However, I
like to bring a little bit ofpoor comic relief to this
because, obviously, my cohosthere, Chris Pacquero brings all
the knowledge when it's just meand him, but he does not know
(01:47):
everything, which is why webring on these great guests.
So I won't introduce him, but Iwill introduce Chris Pacquero.
Welcome back to your show, sir.We opened the door. We let you
in. How's it going?
Chris Picciurro, CPA (01:59):
It's going great. And you know what? I
don't know any everything.That's for sure nobody does. But
more importantly than what youknow, it's who you know.
And I'm excited to welcome backScott Mauer from Advanta IRA.
You guys are in for a treattoday. Scott's the VP of sales
and manages an amazing teambecause there's a lot of
(02:23):
questions in the teaching taxtool community and in our
private CPA practice about selfdirected IRAs. You know, we're
from and self directedretirement accounts. So we're
gonna break down those rules.
We found out to I don't know howI didn't know this before
because we've been working withScott for a while that he is a
Florida Gator two time alum. Sochomp chomp to all the Gator
(02:45):
fans out there. And, you know,they, John, I I know you
probably don't know this, butthey had kind of a decent
basketball year. Just decentthis year.
John Tripolsky (02:54):
Yeah. Yeah. I wouldn't I wouldn't know that
unless they unless they arereally good at hockey all of a
sudden. You know? I'm kind of inthe I'm kind of in the dark with
that.
So, you know, it's it
Chris Picciurro, CPA (03:03):
is I haven't I haven't seen their
I've had the privilege ofvisiting their campus probably
about eight times, and I've yetto see the hockey arena.
John Tripolsky (03:09):
But But and and honestly, Chris, before we get
into it and and really, give themic over to Scott here too. So
we're dating back a little bithere. So Scott has been on here
with us, but we're going, like,all the way back. Like, he's
kind of an an an OG as we usedto say. Right?
So episode 22 is what we had himon. So to give you a a kind of a
(03:32):
a context around that. Right? Soif if anybody hasn't been
listening that long for shame onyou, you've have not been
Chris Picciurro, CPA (03:37):
around long listening to
John Tripolsky (03:38):
every episode. But that is literally in March
2023. So things have probablychanged a little bit. You know,
Scott and Chris, you guys areprobably getting wiser with
time. Right?
I can't say Chris is old becauseI always do that, but, you know,
it's all good. It's all good. Sowell welcome back, man. We're
happy to have you.
Scott Maurer (03:56):
Oh, great. Hey. Great to be out with you guys.
Appreciate the, the invitecoming and share some knowledge
with the people. And, yeah, thethe hockey arena is hard to find
at University of Florida.
It's double it doubles as a poolbehind one of the dorms, and
when it when it freezes over,they play hockey on it.
John Tripolsky (04:09):
Hey. At least you didn't say it doubles as
storage for, you know, thelandscapers or something. So
it's all good. It works.
Chris Picciurro, CPA (04:15):
I bet, you know, I bet the more roller
hockey than ice hockey has beenplayed on that. So, well, Scott,
tell us about a little bit aboutyourself. How did you get into,
the space that you're in withwith self directed retirement
accounts and where you, I mean,you're in a amazing part of the
country. You stayed in Florida.And, yeah, tell us a little bit
(04:37):
about yourself and what led youto where you're at right now
professionally and personally,and then we'll jump in.
Sure. Yeah. I was, like, I
Scott Maurer (04:43):
was born and raised here in Tampa, Florida,
which is is odd odd, but it'sit's a little rare than other
places. A lot of transplantshere in the in the area. In
fact, both my parents weretransplants to the Tampa Bay
area, but my sister and I wereborn here. Born and raised here,
lives here pretty much all mylife. As you mentioned, went to
school, the University ofFlorida in Gainesville.
You know, went got my went for awhile, went back, got my law
(05:05):
degree. And coming out of lawschool, you know, looking to,
enter the enter the a differenttype of workforce I've been in
before and and met our owner,Jack Callahan, who was also an
attorney and had this thiscompany where we help people who
have, you know, retirementaccounts, people who are looking
to do something outside of thenorm with their retirement
accounts, take advantages ofdifferent opportunities. He was
(05:26):
looking to grow at that time.You know, the the company was, I
think, just about two or threeyears old. I was employee number
four or five, and we're now Wow.
We're, yeah, we're now well overwell into the fifties, and just
we actually just moved into anew building last year at this
time and as or almost outgrowingthat building. So it's good
thing that we brought broughtmore space next door as well. So
(05:47):
we're gonna continue to expand,but that's kinda how I got into
the business. It was, justmeeting Jack, and really
learning. You know, I didn'tknow much about retirement plans
and much less investing in realestate and things of that nature
and have learned a lot of itjust on the job.
And learning the learningcontinues today. We always see
something unique, somethingdifferent with people, looking
(06:09):
to do with their their IRAs,their Roth IRAs, etcetera.
Chris Picciurro, CPA (06:13):
No. That's I mean, that's a great point
because a lot of times peoplefeel like their choices are very
limited or more traditional whenin when working with their I
with their retirement assets.And and what I see on the tax
side is a lot of times someonemight want to invest in
something like real estate orsomething that's not
traditional, we'll say, and theyend up taking a distribution
(06:34):
from their retirement accountgetting paying a tax on it,
maybe even a 10% penalty only toinvest in something that if they
knew, they could have just donewithin their IRA. Are you seeing
that have you seen that over theyears as well?
Scott Maurer (06:46):
Absolutely. Yeah. It's it's something that most
people don't know about, Ithink, primarily because their
IRAs, maybe their old four zeroone k account is with a a firm.
Like, you're not gonna not badmouthing Fidelity, Schwab, and
those companies of the world,but they they stick to what they
know best, which is publiclytraded securities, stocks and
mutual funds. And so they're notgonna tell their clients that
you can invest in rentalproperties or you can invest in
(07:09):
multifamily real estate.
You can buy physical gold andsilver. You can invest in
startup companies. All thedifferent things you can do
within an IRA because they'renot willing to hold it. So
that's, you know, the equivalentof, you know, McDonald's telling
everyone, you know, that, youknow, they you should go have
pizza for for lunch. You know,we don't have pizza here, but
you should go somewhere else.
So, that's that's theequivalent, I think, in the the
(07:30):
the analogy in the industry. Soit's you know, most people just
don't know it's possible. Soeither they're lucky enough to
find someone like us or yourselfwho can let them know of that
option. But, unfortunately,sometimes people don't know.
They talk to their adviser whosays, well, you're just gonna
have to take the money out ofthe account to make that
investment, and they they paytaxes.
They might pay penalties on it.But the self directed IRA, as
(07:51):
you said, allows you to avoidthat and simply make the
investment inside of theaccount. Instead of investing in
a mutual fund, you invest in inthis alternative asset, and the
gains from that investment noware what is growing your
retirement accounts. So itreally allows you that that true
diversity, not amongst, youknow, different types of funds,
but actually among differentasset classes altogether.
John Tripolsky (08:13):
And, Scott, I think this plays hand in hand
too with what me and Chris arealways talking about. I mean,
Chris, literally, the time aboutcontrolling your tax bill.
Right? Like, controlling therelationship with the IRS. So
why why I say that's reallyrelated to, right, is through
what you're talking about herespecifically, it's really giving
somebody as much control as theywant to to invest and really be
(08:33):
there be the manager of itinstead of you know, I think
conditionally, a lot of peoplethat started off in the
workforce.
Right? W two, one job, goingthrough it, pumping money into
into retirement. It's kind ofconditioned maybe into us.
Right? Like, you just put itthere, somebody else does it,
and then you collect when it'stime where literally what you're
saying is that there's a lot offreedom in it, and it's as much
(08:55):
as you want to be.
Right?
Scott Maurer (08:57):
And I and I think that's what's so attractive to a
lot of people is, you know, youhave, you know, different events
happen, you know, in in ourworld every decade. You got
COVID. You have, you know, wars,depressions, recessions, things
like that where, you know, thatimpact someone's retirement
account. You know, they talkabout, you know, back in COVID
or or actually, it was '2002/2008, April is becoming
(09:19):
02/2001 k's. You know?
Funny unless that's youraccount, and you're just seeing
the the dip in the value withand the reality is what happens
is people feel powerless. Right?They my money's in the market.
The market's going down. Myalternative is to take it out
and stick it in a CD at, youknow, 2% or 3%.
And I know in doing that, that'snot a good long term strategy,
but what else could I do? So theself directed IRA allows them
(09:42):
that they see otheropportunities where they can
drive higher returns. They can Ican go invest with my friend
instead because I I you know,I've known him for years? I see
what he does, and he'ssuccessful at what he does. So
if I can, you know, work withhim, I can have my retirement
account going through thatvehicle, whether it's, again,
whether it's rental property,whether it's startup companies.
(10:02):
You know, you can lend moneyfrom your IRA. There's so many
different things you can do, andthat's what the self directed
IRA gives you, John. I thinkthat was a great point is
control. And it's not and Iwanna point out too. This is not
an all or nothing strategy.
That's very important thing. Ithink people think, well, if I'm
gonna self direct, I could usesome of my money to invest, but
I don't wanna put all my there.Well, that's great. The IRS
allows you to have multipleaccounts, move money between
(10:25):
different accounts, and investin different places. So a lot of
our clients hold an alternativeasset on our platform, but they
maintain their Schwab orFidelity account for more
conventional assets, and theytransfer money between accounts.
And when you transfer money fromone IRA to the other, zero tax
consequence. Zero reportingdone. It's you can do it anytime
(10:47):
and it often as often as youwould like. That's the
important. You're only taxed themoney when you pull it out into
your own pocket, and that's thedanger of people who don't know
about self directed IRAs.
They pull the money out. Theypay taxes, and they move
forward, and and they're taxedagain on that income rather than
simply putting it inside theIRA. Absolute so when we're
talking no. That's a greatpoint,
Chris Picciurro, CPA (11:08):
and I was gonna mention that all or
nothing. And, Dirk, I ask youabout that because that's that's
something to consider where Imean, I've seen a lot of
situations where someone has asignificant amount of cash in
their retirement account, thenI'm gonna ask them about
something else about selfdirected type account types, and
maybe they're getting charged toAUM, a wrap fee based on the
(11:29):
assets in there, and they've gota bunch of cash that's doing
nothing. And they they have asituation where they have
opportunities to invest inthings that pique their interest
outside of what I would callyour traditional or publicly
traded assets, especially as wesee well, I'm gonna put a pin on
that because we're gonna talkabout what you can actually
invest in within a self directedaccount. You mentioned self
(11:51):
directed IRA. Are there othertype of a other types of
retirement accounts that can beself directed?
And and if you had to describe,like, self what self directed
is, does that mean someone hasto do like, go to the bank and
do everything? Or or what iswhat is the VANA IRA how do they
partner with people to helpadminister that that account to
(12:13):
keep it in con compliance iswhat I'm saying.
Scott Maurer (12:16):
Yeah. So the the key thing to note is the word
self directed is referring towhat you can invest in or how
you can control your account. Attheir core, a self directed
account is still, from a taxperspective, a traditional IRA
or a Roth IRA or a SEP IRA ifyou're self employed. It could
be a solo four zero one k planif you're self employed and
(12:38):
wanna start your own your ownfour zero one k and and make
larger contributions. So selfdirected just just saying, you
can invest in the things thatyou know that you can control,
that that you understand.
But, again, tax wise at theircore, it's traditional IRAs.
It's Roth accounts, SEPs, solofour zero one k's, any former
employer's plan. So if you havean old four zero one k, an old
four zero three b plan, througha prior employer, those monies
(13:02):
can be rolled over, into an anIRA account as well with zero
tax consequence and theninvested. So I think that's
that's a very important thing Ithink where people miss is they
think self directed, that's acertain type of IRA, and it's
not. It's I mean, our ourpaperwork, when you sign up an
account, you check a box fortraditionally.
You check a box for Roth. It'sjust gonna be what those
investment options are.
Chris Picciurro, CPA (13:22):
So you've got SEP, Solo, Roth,
traditional, and I believesimple, we can't do self
directed at this point. Is thatNo. You you can self
Scott Maurer (13:31):
I I forgot. You can self direct to simple.
Chris Picciurro, CPA (13:33):
Just no. Okay. Cool. Yeah. Mhmm.
I learned something. Alright. Ilearned a lot. I I've always
learned stuff. That's cool.
Okay. So you could and so, also,you know, I know you can roll
money over from anotherretirement account, which is
typically the way that they getfunded. Can can taxpayers
contribute to these accountslike normal IRAs?
Scott Maurer (13:52):
Yeah. They again, the the IRAs that we hold
operate the exact same as anyother IRA. So the contribution
limits, the distribution rules,everything is the exact same.
The only difference is the typeof investments that you're
placing inside the IRA account.That's, again, what you
mentioned.
That's what we do at Advance IRAwhen you wanna invest in a piece
of real estate or you wannainvest into a private debt fund
(14:12):
or something like that. Our jobis to make sure that the
paperwork all gets preparedproperly in the name of your
IRA. Make sure you review andapprove it for us as well so
that, you know, thisdemonstrates very clearly to the
IRS that this asset, is insideof your IRA and therefore not
taxable to you, to make theinvestment and then not taxable
on the returns that are comingback into the IRA account. So
Chris Picciurro, CPA (14:37):
what are some of the common, investments
that are made in a self directedretirement account? I mean,
obviously well, I'm gonna shutup and listen to because you're
seeing it on you and your teamare seeing it on a daily basis.
Scott Maurer (14:51):
Yeah. I mean, it's it's I mentioned I keep
mentioning real estate becausewe it is real estate heavy.
Probably a good 60 to 70% of theassets we hold are real estate
in nature, but that term meansso much to so many different
people. It's it's rentalproperties. It's rehabs.
It's tax liens and tax deeds.It's lending money from your IRA
to somebody else who's buyingreal estate, and you're IRA
(15:14):
acting as a bank. We've seen anincrease over the years in
people investing in, you know,multifamily and commercial
property where Mhmm. I don'thave enough on my IRA to buy,
and maybe I don't want to useall my IRA funds to buy a
rental, you know, three tworental property, but I'm happy
to put 50 or 100 k into somebodyelse's, you know, commercial ass
commercial asset Right. And thenjust share in the profit.
So a lot
John Tripolsky (15:35):
of real
Scott Maurer (15:35):
estate. Outside of real estate, we've seen, you
know, the the private LLCs,startup companies, your debt
fundings, startups, preciousmetals, people wanting to buy
physical gold and silver. We'vehad a large of our clients
invest in rights, oil and gasbonds, things like that as well.
(15:57):
Again Right. It's rather thanthe and the other thing I think
is important for people tounderstand, rather than trying
to see where do I get that listof all the possible investments,
the IRS list simply says youcannot invest in life insurance,
and you cannot invest in thingsthat are deemed to be a
collectible, like artwork andantiques.
So that's the IRS list. It's notall the things you can do. It's
(16:18):
simply you can't buy lifeinsurance, and you can't buy
collectibles. Gotcha.
John Tripolsky (16:23):
Which is a lot more clear when they do it that
way.
Scott Maurer (16:26):
Yes. Yeah. Exactly. Exactly.
Chris Picciurro, CPA (16:28):
That so you could and so I've are you
seeing more people invest indigital assets,
cryptocurrencies? And and ifthey are, they are you what's
that mix between Roth and andpretax accounts?
Scott Maurer (16:42):
Yeah. I mean, we certainly have it. I was gonna
mention as you're talking Italked the rule these rules were
written back in the midseventies, right, as far as what
you can and can't invest in. SoI don't know. I mean, maybe
someone back in the seventiessaid, hey.
One day there's gonna be an asssomething you can pay for that
you don't even have to see yourtouch. But, yeah, we have we
certainly have clients whoinvest some in crypto. As far as
the the, I guess, breakoutbetween Roth and tradition, I
(17:04):
don't have those numbers, but, Imean, in general, our assets and
I think this is kind of a goodthing for people to understand.
It's it's predominantlytraditional because that's where
more people have some of theirmoney, but there's a fair number
of of Roth. But for peopledeciding when they wanna make an
investment, it's it's more so Isee an investment opportunity,
and I wanna make this.
I wanna take advantage of it,and this is where my retirement
(17:25):
funds are. They're in atraditional IRA or they're in a
Roth IRA, and I wanna I don'twanna miss out on this
investment. So it's but, yeah,there's certainly circumstances
when, you know, people who arepredicting a large return. Years
ago, we had a insurancecompanies a startup insurance
company. People wanted to investtheir Roth IRA into that startup
company because they knew whenit went public, they were gonna
(17:47):
double or triple their money.
That was all gonna be tax freeinside the Roth. So some people
invested their traditional fundin it, but, yeah, that was a
strategy. But, certainly,digital assets is something
we've definitely seen arise inthe last few years.
Chris Picciurro, CPA: Absolutely. And I'm you know, (18:00):
undefined
the cool thing with this is ifyou've got you know, obviously,
do your due diligence, but youthis this self directed account
can invest in LLC. So let's say,John, you wanna start a car
wash, and you Hey. Lisa's not a
John Tripolsky (18:17):
you know, I don't wanna invest in another
Afghan business.
Chris Picciurro, CPA (18:20):
No. I'm gonna make it more money.
John Tripolsky (18:21):
Hey. Let's say we own that one. Remember from,
like, 10 podcasts. Be like, Idon't wanna invest in another
one. I want a 100% market share.
Is is that's that's the wholedeal behind it, is I don't want
any comp competition. So let'shear about your car wash.
Chris Picciurro, CPA (18:33):
But let's say you wanted you wanted your
car wash and I wanted a I wannainvest a $100,000. I could use
my I could roll that money frommy, you know, simple IRA into a
self directed IRA, and then myIRA own the LLC interest. And
that could you know, if I thatthat could be that that could be
(18:54):
beneficial for all of us. Imean, because if I took it out
of that IRA, like I said, Iwould IRA, I'd be paying a
significant tax on it. Thatbeing said, Scott, there are
some rules with withdisqualified persons.
John and I are not related.Thank goodness. Our family
(19:14):
gatherings would be really amess.
Scott Maurer (19:17):
What are some of the rules get
John Tripolsky (19:18):
kicked out of the of Thanksgiving.
Chris Picciurro, CPA (19:21):
Yeah. Self dealings and and, you know, who
you can be partnering up withand investing with? Because a
lot of investments occur betweenfamilies and spouses and all
this other stuff.
Scott Maurer (19:30):
Yeah. So it's the rules are no collectibles and no
life insurance. Then the otherarena is your IRA cannot
transact with or benefit adisqualified person. And very
simply, the the disqualifiedpersons for your IRA, if it's
your IRA account, you and yourspouse, your parents and
grandparents, your kids andgrandkids, and any business or
(19:51):
entity owned by one of parties.So in in layman's terms, my IRA
can't lend me money.
My IRA cannot lend my son money.My IRA cannot buy a house and
lease it to one of thoseindividuals. My IRA cannot buy a
piece of real estate that one ofthose individuals wants to live
in or get any use out of. Sothose rules definitely pop up.
If it was a a business, youknow, startup, your IRA can't
(20:13):
invest in your son's business.
So there's definitely somerules, but that's it. It's
really up and down your linealtree. Brothers and sisters, your
IRA can can invest with on a aslong as you're doing on an arm's
length basis.
Chris Picciurro, CPA (20:25):
Mhmm.
Scott Maurer (20:26):
But that that's a key thing to keep in mind when
you're when you start talkingabout family and retirement
accounts, things can get alittle tricky and sticky and and
maybe not possible. That'sthat's what we're here for,
obviously. When you have thosequestions, call us. Let's walk
through the scenario, and kindaI can let you know my thoughts
on it and whether or not youneed to seek other advice.
John Tripolsky (20:43):
And, Scott, a question for you too. So this is
I mean, obviously, we're talkingabout, you know, some of the,
rules and regs from this beingwritten in the seventies. Right?
So so think about that, youknow, for somebody younger.
Right?
Like, that basically predatesbottled water. Right? Like,
before there was bottle beingsold to you or water being sold
to you in a bottle, some of thiswas written. But the reason why
I say that, right, is do haveyou seen a lot of changes just
(21:06):
with the, really just theInternet being available to
people, apps, like, as a whole.Right?
Like, you talk about, you know,going back in time. Right?
Somebody might have been sittingthere waiting to open the mail
that usually shows up at theirdoor the fifth or sixth of the
month that has their statementin it, where I couldn't tell you
the last time I actually got aphysical statement that I opened
(21:27):
and looked at for one onanything, if I even get one. So,
really, the, the availability oftechnology. Again, do you find
people are much more inclined towant to even if they don't, you
know, go into self directed youknow, the self directed route?
Do you think that they're,obviously, the ability to do it
is different? But, like, how doyou think technology and tech as
(21:49):
a whole has really impactedthat? Yeah. I mean, I I think
Changed it.
Scott Maurer (21:53):
Of on a micro level, we've had clients who've
invested in tech technologyfirms or apps even. Like, there
have been there's one client ofours. I know this his strategy
is he invested in, like, six orseven different little tiny
startups, which some of whichwere just, like, new apps for
parents to use for their kidsand things like that. And, he
knows that some of them aren'tgonna work out, but he know he's
hoping that a couple of them aregonna hit home runs, and there's
(22:15):
there's his gain. And I think ona bigger on a different scale
is, I think, as youngergenerations are looking to come
into this know, come intoindustries and and raise
capital, they're not alwayslooking for the traditional
funding mechanisms that, youknow, the us or our parents are
probably looking at.
So I think that's where selfdirected IRAs can be enticing
them. It's something new. It'ssomething different, and they're
(22:36):
they're kinda teaching the olddog new tricks when they're
talking to their investors of ofhere's how you can utilize some
of that capital, and realizingthey're real they're, you know,
the they're smart enough toknow, like, hey. This is a you
know, trillions and trillions ofdollars in retirement accounts
they might have access to ifthey can show people how to use
it. So from that standpoint, Ithink the the technology and
that kind of revolution hascertainly helped our industry
(23:00):
because people are it just is isopening people's eyes.
Hey. Things are different.Things are new, across all all
spectrums.
John Tripolsky (23:07):
And even just learning of new opportunities.
Right?
Chris Picciurro, CPA (23:10):
Like, back
John Tripolsky (23:10):
in the day, you might you might only hear of
companies starting within a a100 mile radius. Now it's you
know, it depends on where youconsume your news at. It's you
could find anything andeverything that, you know, what
went public two minutes ago. Ornope. This one's not.
This one just started. Somebodyjust started this and kind of
your, your overall reach is nowunlimited Oh, yeah. Globally.
Scott Maurer (23:33):
In that realm, I mean, you know, the the reels
that are out there, the littlevideos you get before you click
on YouTube and things like that,they're I've definitely seen a
lot of, people that use ourservices and and companies that
refer people to us and othersimilar industries using that as
added advertising. And a lotsometimes they'll even say, hey.
This isn't, you know, perfectfor a self directed IRA or is
(23:54):
IRA eligible investments, thingslike that. So, yep, definitely
utilizing that. Like you said,getting that out.
Yeah. How would you have foundout about a multifamily
partnership investment, youknow, twenty years Might have
had to know somebody or go tothe steak dinner, right, at the
at the at the hotel or whatnotto be invited. Now it's like,
oh, you just you look on socialmedia, and there's a little ad
(24:14):
talking about it. You know? Andyou probably have to do your
research on what an accreditedinvestor is and how do I get
into it and do my due diligenceon the investment, but it's
opening people's ideas for for alot more out there.
Chris Picciurro, CPA (24:26):
Well, I wanna touch wrap up by touching
on a couple not as fun points,but some compliance driven
points when it comes to selfdirected IRAs. And one of the
reasons you do wanna work with acompany like Advanta, you know,
transparently, we've got I mean,I have a real estate kinda
syndication I put together tenyears ago, and I've got a few
people that did invest within aself directed IRA, and it's That
(24:50):
being said, sometimes taxpayerslike to take things into their
own hands. And I can't tell youhow many times I've heard now,
not our clients, thankfully,people would say, oh, I'm gonna
run a $10.31 exchange. Really?Great.
Yeah. I sold my property. I justput the money in my bank
account, but I'm gonna get aqualified intermediary when I'm
ready. It doesn't work that way.Right?
So in as far as self directedIRAs, can you talk a little bit,
(25:16):
about what the custodianrequirement is, and it which is
really there to protect someonefrom themselves? And then
finally, this really isn't aquestion, but I I think it is
important to to note that I likeusing the self directed IRA with
more more a more traditionalIRA, for lack of a better term,
(25:37):
because sometimes you you don'twant all of your assets in, in
something that might not be asliquid as you'd like. Right?
Because those required minimumdistribution rules apply. So
having maybe an IRA accountthat's more liquid to kinda take
those RMDs because you don'twanna have to sell your property
in your in your self directedIRA in a distressed situation
because you need need the money.
(25:58):
But Sure. But, yeah, I I mean,the you know, so maybe practical
tips for people, juggling RMDsand then the custodial,
requirement.
Scott Maurer (26:09):
Yeah. So the the custodial requirement for for
any retirement account, anyqualified account, you have to
have a qualified custodian or ortrustee. So you can't simply go
to a bank account and tell themto when they say, hey. What's
this new account open as? Theyjust say it's My IRA.
Like, it it you have to have anaccount through a bank, a trust
company, brokerage firms,etcetera, that are going to do
(26:32):
the IRS reporting that areactually qualified and able to
report to the IRS, yourcontributions, your
distributions, your annualvaluation. So you do have to
have a custodian, someone likeAdana, someone like Charles
Schwab, who's going to do thatreporting and and catalog and
report the the those ask thosethose items back to the IRS on
an annual basis. So you can'tjust simply have you you can't
(26:53):
just say, I I created my ownIRA. This is the account I'm
using for it. So there there areways that we that's definitely
something to call me about.
There's ways you can get morecontrol over your funds by
utilizing LLCs and trusts. Youstill have to have a custodian
that who's gonna do thereporting on it. So that's just
an important note. Like I said,that's people shouldn't be doing
that themselves. They have touse a a a qualified custodian to
(27:14):
do it.
That's that's the role we serve.The RMD issue is definitely a
good one to consider. I thinkthat's know, when you invest in
things that are self directed,it's, you know, pieces of real
estate, private partnerships.They are not liquid. You can't
just sell them like you can astock or mutual fund.
So if you're getting to the ageof 73, we're getting close and
you're like, hey. I'm I'm gonnahave to start taking required
(27:37):
distribution for my regular IRAaccount, per IRS rules, you
wanna make sure you have theability to draw that RMD out
from some source. Now if yourself directed asset is producing
enough cash every year that youcan meet the RMD from there,
great. If not, you're gonnawanna be said like, Chris, have
another IRA where you cansatisfy that RMD from and not
have to mess with that illiquidasset inside the the self
(27:59):
directed account.
Chris Picciurro, CPA (28:00):
Right.
Scott Maurer (28:01):
That's just proper planning. That's something that
people would go to you for andsay, let's make sure we do this
right too. Really? Yes.
Chris Picciurro, CPA (28:08):
Well, no. I appreciate it. Go ahead, John.
Scott Maurer (28:11):
I'm sorry.
John Tripolsky (28:11):
No. No. Was gonna say this is great having
you back, man, and we'll we'llhave to make a better habit
about this and not wait twoyears
Chris Picciurro, CPA (28:18):
to get back in the shower.
Scott Maurer (28:19):
Yeah. Anytime. If you have, you wanna yeah. Have
me on talk about the thecheckbook route or just other
areas. There there are definitelittle intricacies and things
that people that come up thatpeople need to know about and
and and whatnot outside just ageneral overview.
So, yeah, happy to come backanytime.
Chris Picciurro, CPA (28:33):
I'm gonna get greedy for a second. I'm
sorry. I know we're we'resupposed to let Scott go, but
can you just touch on the youknow, within a self directed
retirement account, there are acouple options as far as, you
know, this could be a wholeanother piece of content, but,
the checkbook versus non versenoncheckbook and and and which
(28:53):
one is better? Because I I couldtell you that I've seen a big
spike in private lending throughthe self directed retirement
accounts. Yeah.
Can you kinda give us an becausesome people do hear they might
say, I've got a checkbook IRA.Well, they don't realize that's
a type of self directed IRA.
John Tripolsky (29:09):
Correct.
Scott Maurer (29:09):
Right. Yep. So the the checkbook structured did we
first talk about what I wouldcall the custodial IRA, which is
someone sets up an account withus and they wanna do private
lending through their IRA? Theycontact us. They tell us who
their borrower is.
They tell us how much it is theywanna lend, and our job is to
make sure that the loandocuments are properly prepared,
make sure the clients approvedit, of the investment before we
(29:31):
send cash out of the IRA to theclosing agent to close that
private loan, and then theborrower's payments all come
back to Advanta for deposits tothe client's accounts. That's
really you know, we're handlingthe money in and out of the
account. You're still directingthe activity, but we have
control, I guess, over the cashor the checkbook. So now
checkbook IRA, now maybe we needto change this term, talk about
technology, how many people areusing checkbooks anymore, but
(29:53):
that's the terminology that'sused, where you can set up an
LLC or a private trust where theowner of that LLC is your IRA
account, and you can directAdvanta to fund a bank account
in the name of that LLC. And ifyou're the manager of that LLC,
you can now make all of yourprivate loan investments in and
(30:13):
out of that LLC bank account.
So you have much more controlover the cash, making the
investments. You're nowresponsible for the
recordkeeping. Advanta is stillthere as a custodian, but your
IRA instead of hand holding alitany of private loans, we are
holding the membership in theLLC. So we're still reporting to
the IRS on that, but you havemuch more control as manager of
(30:36):
the LLC. Enough control to dowhat you wanna do, enough
control to hang yourself ifyou're not careful.
So that's something you wannamake sure you're you're well
aware of when you're doing, butthat's just a different strategy
that people use to to take thatlevel of control to the next
level.
John Tripolsky (30:49):
I I got my trusty old pen out. Here I am
learning things today, like backin school. So I'm glad you
reined into that. Mean, they're,discuss that. That's actually a
good one that I bet a lot ofpeople don't know about.
I think that's something too. Soand it's probably probably a
decent place to to end it up. Wedon't wanna give away all the
secrets in one discussion. But,yes, Scott, we'll we'll have you
back there. We'll, you know,either do a a take this one step
(31:12):
further either on a podcast oreven if we do some little
breakout sessions, I think we'llbe able to to get some good
stuff out with people, and Ilook forward to that.
Scott Maurer (31:19):
Great. Yeah. Looking forward to it, guys. Let
me know when.
John Tripolsky (31:22):
Absolutely. Absolutely. Well, we'll let you
off the hook this time. But,again, we'll have you back on so
you can't can't get away thateasy again. But and and
honestly, anybody that'slistening or watching this,
obviously, on YouTube, if you'relistening, you're missing out on
something great.
You can stare at Chris theentire time. Right? So hop on
YouTube. Subscribe to that.Again, if you have any
questions, we'll drop someresources here in the show notes
(31:44):
for you.
If you're on YouTube, it's rightthere. If you're somewhere else,
it's probably on that side overthere. But check it out. Don't
be lazy. Click on thoseresources.
Do not forget to subscribe tothis channel specifically. We
have amazing, amazing contentout here. I think we just passed
over, about 500 videos, piecesof content that we've put on
YouTube specifically. So do themath. That's a lot of stuff.
(32:07):
A lot of stuff you can searchthrough as well as we're working
on a couple, we can call themlittle top secret projects. But
before we even say anythingabout them, we'll let you go
too. Thank you again everybodyfor joining us here on the
teaching tax flow podcast. We'llsee you again next week.
Different date, same day of theweek, completely different
topic.
Have a good week, everybody.
Disclaimer (32:30):
The content provided is for educational purposes
only. We encourage you to seekpersonalized investment advice
from your financialprofessional. For all tax and
legal advice, please consultyour CPA or attorney. Investment
advisory services are offeredthrough Cabin Advisors, a
registered investment advisor.Securities are offered through
Cabin Securities, a registeredbroker dealer.
The content of this podcast doesnot constitute an offer of
(32:51):
securities. Offerings can onlybe made through an offering
memorandum, and you shouldcarefully examine the risk
factors and other informationcontained in the memorandum.
Hey, everybody, and welcome back to the teaching
tax flow podcast episode 151today. We are jumping into those
self directed IRAs. We're gonnadive deep into them, explain
what they are, maybe whatthey're not as well with a great
guest. But as always, let's takea brief moment and thank our
episode sponsor.
Ad Read (00:26):
Hi. Chris Picciurro here, founder of Teaching Tax
Flow, cohost of the Teaching TaxFlow podcast and pickleball
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John Tripolsky (01:25):
Hey, everybody, and welcome back to the teaching
tax flow podcast. We know thatyou know what you're doing here
because, obviously, we have thebest content out there. Just
kidding. There's a lot of greatcontent out there. However, I
like to bring a little bit ofpoor comic relief to this
because, obviously, my cohosthere, Chris Pacquero brings all
the knowledge when it's just meand him, but he does not know
(01:47):
everything, which is why webring on these great guests.
So I won't introduce him, but Iwill introduce Chris Pacquero.
Welcome back to your show, sir.We opened the door. We let you
in. How's it going?
Chris Picciurro, CPA (01:59):
It's going great. And you know what? I
don't know any everything.That's for sure nobody does. But
more importantly than what youknow, it's who you know.
And I'm excited to welcome backScott Mauer from Advanta IRA.
You guys are in for a treattoday. Scott's the VP of sales
and manages an amazing teambecause there's a lot of
(02:23):
questions in the teaching taxtool community and in our
private CPA practice about selfdirected IRAs. You know, we're
from and self directedretirement accounts. So we're
gonna break down those rules.
We found out to I don't know howI didn't know this before
because we've been working withScott for a while that he is a
Florida Gator two time alum. Sochomp chomp to all the Gator
(02:45):
fans out there. And, you know,they, John, I I know you
probably don't know this, butthey had kind of a decent
basketball year. Just decentthis year.
John Tripolsky (02:54):
Yeah. Yeah. I wouldn't I wouldn't know that
unless they unless they arereally good at hockey all of a
sudden. You know? I'm kind of inthe I'm kind of in the dark with
that.
So, you know, it's it
Chris Picciurro, CPA (03:03):
is I haven't I haven't seen their
I've had the privilege ofvisiting their campus probably
about eight times, and I've yetto see the hockey arena.
John Tripolsky (03:09):
But But and and honestly, Chris, before we get
into it and and really, give themic over to Scott here too. So
we're dating back a little bithere. So Scott has been on here
with us, but we're going, like,all the way back. Like, he's
kind of an an an OG as we usedto say. Right?
So episode 22 is what we had himon. So to give you a a kind of a
(03:32):
a context around that. Right? Soif if anybody hasn't been
listening that long for shame onyou, you've have not been
Chris Picciurro, CPA (03:37):
around long listening to
John Tripolsky (03:38):
every episode. But that is literally in March
2023. So things have probablychanged a little bit. You know,
Scott and Chris, you guys areprobably getting wiser with
time. Right?
I can't say Chris is old becauseI always do that, but, you know,
it's all good. It's all good. Sowell welcome back, man. We're
happy to have you.
Scott Maurer (03:56):
Oh, great. Hey. Great to be out with you guys.
Appreciate the, the invitecoming and share some knowledge
with the people. And, yeah, thethe hockey arena is hard to find
at University of Florida.
It's double it doubles as a poolbehind one of the dorms, and
when it when it freezes over,they play hockey on it.
John Tripolsky (04:09):
Hey. At least you didn't say it doubles as
storage for, you know, thelandscapers or something. So
it's all good. It works.
Chris Picciurro, CPA (04:15):
I bet, you know, I bet the more roller
hockey than ice hockey has beenplayed on that. So, well, Scott,
tell us about a little bit aboutyourself. How did you get into,
the space that you're in withwith self directed retirement
accounts and where you, I mean,you're in a amazing part of the
country. You stayed in Florida.And, yeah, tell us a little bit
(04:37):
about yourself and what led youto where you're at right now
professionally and personally,and then we'll jump in.
Sure. Yeah. I was, like, I
Scott Maurer (04:43):
was born and raised here in Tampa, Florida,
which is is odd odd, but it'sit's a little rare than other
places. A lot of transplantshere in the in the area. In
fact, both my parents weretransplants to the Tampa Bay
area, but my sister and I wereborn here. Born and raised here,
lives here pretty much all mylife. As you mentioned, went to
school, the University ofFlorida in Gainesville.
You know, went got my went for awhile, went back, got my law
(05:05):
degree. And coming out of lawschool, you know, looking to,
enter the enter the a differenttype of workforce I've been in
before and and met our owner,Jack Callahan, who was also an
attorney and had this thiscompany where we help people who
have, you know, retirementaccounts, people who are looking
to do something outside of thenorm with their retirement
accounts, take advantages ofdifferent opportunities. He was
(05:26):
looking to grow at that time.You know, the the company was, I
think, just about two or threeyears old. I was employee number
four or five, and we're now Wow.
We're, yeah, we're now well overwell into the fifties, and just
we actually just moved into anew building last year at this
time and as or almost outgrowingthat building. So it's good
thing that we brought broughtmore space next door as well. So
(05:47):
we're gonna continue to expand,but that's kinda how I got into
the business. It was, justmeeting Jack, and really
learning. You know, I didn'tknow much about retirement plans
and much less investing in realestate and things of that nature
and have learned a lot of itjust on the job.
And learning the learningcontinues today. We always see
something unique, somethingdifferent with people, looking
(06:09):
to do with their their IRAs,their Roth IRAs, etcetera.
Chris Picciurro, CPA (06:13):
No. That's I mean, that's a great point
because a lot of times peoplefeel like their choices are very
limited or more traditional whenin when working with their I
with their retirement assets.And and what I see on the tax
side is a lot of times someonemight want to invest in
something like real estate orsomething that's not
traditional, we'll say, and theyend up taking a distribution
(06:34):
from their retirement accountgetting paying a tax on it,
maybe even a 10% penalty only toinvest in something that if they
knew, they could have just donewithin their IRA. Are you seeing
that have you seen that over theyears as well?
Scott Maurer (06:46):
Absolutely. Yeah. It's it's something that most
people don't know about, Ithink, primarily because their
IRAs, maybe their old four zeroone k account is with a a firm.
Like, you're not gonna not badmouthing Fidelity, Schwab, and
those companies of the world,but they they stick to what they
know best, which is publiclytraded securities, stocks and
mutual funds. And so they're notgonna tell their clients that
you can invest in rentalproperties or you can invest in
(07:09):
multifamily real estate.
You can buy physical gold andsilver. You can invest in
startup companies. All thedifferent things you can do
within an IRA because they'renot willing to hold it. So
that's, you know, the equivalentof, you know, McDonald's telling
everyone, you know, that, youknow, they you should go have
pizza for for lunch. You know,we don't have pizza here, but
you should go somewhere else.
So, that's that's theequivalent, I think, in the the
(07:30):
the analogy in the industry. Soit's you know, most people just
don't know it's possible. Soeither they're lucky enough to
find someone like us or yourselfwho can let them know of that
option. But, unfortunately,sometimes people don't know.
They talk to their adviser whosays, well, you're just gonna
have to take the money out ofthe account to make that
investment, and they they paytaxes.
They might pay penalties on it.But the self directed IRA, as
(07:51):
you said, allows you to avoidthat and simply make the
investment inside of theaccount. Instead of investing in
a mutual fund, you invest in inthis alternative asset, and the
gains from that investment noware what is growing your
retirement accounts. So itreally allows you that that true
diversity, not amongst, youknow, different types of funds,
but actually among differentasset classes altogether.
John Tripolsky (08:13):
And, Scott, I think this plays hand in hand
too with what me and Chris arealways talking about. I mean,
Chris, literally, the time aboutcontrolling your tax bill.
Right? Like, controlling therelationship with the IRS. So
why why I say that's reallyrelated to, right, is through
what you're talking about herespecifically, it's really giving
somebody as much control as theywant to to invest and really be
(08:33):
there be the manager of itinstead of you know, I think
conditionally, a lot of peoplethat started off in the
workforce.
Right? W two, one job, goingthrough it, pumping money into
into retirement. It's kind ofconditioned maybe into us.
Right? Like, you just put itthere, somebody else does it,
and then you collect when it'stime where literally what you're
saying is that there's a lot offreedom in it, and it's as much
(08:55):
as you want to be.
Right?
Scott Maurer (08:57):
And I and I think that's what's so attractive to a
lot of people is, you know, youhave, you know, different events
happen, you know, in in ourworld every decade. You got
COVID. You have, you know, wars,depressions, recessions, things
like that where, you know, thatimpact someone's retirement
account. You know, they talkabout, you know, back in COVID
or or actually, it was '2002/2008, April is becoming
(09:19):
02/2001 k's. You know?
Funny unless that's youraccount, and you're just seeing
the the dip in the value withand the reality is what happens
is people feel powerless. Right?They my money's in the market.
The market's going down. Myalternative is to take it out
and stick it in a CD at, youknow, 2% or 3%.
And I know in doing that, that'snot a good long term strategy,
but what else could I do? So theself directed IRA allows them
(09:42):
that they see otheropportunities where they can
drive higher returns. They can Ican go invest with my friend
instead because I I you know,I've known him for years? I see
what he does, and he'ssuccessful at what he does. So
if I can, you know, work withhim, I can have my retirement
account going through thatvehicle, whether it's, again,
whether it's rental property,whether it's startup companies.
(10:02):
You know, you can lend moneyfrom your IRA. There's so many
different things you can do, andthat's what the self directed
IRA gives you, John. I thinkthat was a great point is
control. And it's not and Iwanna point out too. This is not
an all or nothing strategy.
That's very important thing. Ithink people think, well, if I'm
gonna self direct, I could usesome of my money to invest, but
I don't wanna put all my there.Well, that's great. The IRS
allows you to have multipleaccounts, move money between
(10:25):
different accounts, and investin different places. So a lot of
our clients hold an alternativeasset on our platform, but they
maintain their Schwab orFidelity account for more
conventional assets, and theytransfer money between accounts.
And when you transfer money fromone IRA to the other, zero tax
consequence. Zero reportingdone. It's you can do it anytime
(10:47):
and it often as often as youwould like. That's the
important. You're only taxed themoney when you pull it out into
your own pocket, and that's thedanger of people who don't know
about self directed IRAs.
They pull the money out. Theypay taxes, and they move
forward, and and they're taxedagain on that income rather than
simply putting it inside theIRA. Absolute so when we're
talking no. That's a greatpoint,
Chris Picciurro, CPA (11:08):
and I was gonna mention that all or
nothing. And, Dirk, I ask youabout that because that's that's
something to consider where Imean, I've seen a lot of
situations where someone has asignificant amount of cash in
their retirement account, thenI'm gonna ask them about
something else about selfdirected type account types, and
maybe they're getting charged toAUM, a wrap fee based on the
(11:29):
assets in there, and they've gota bunch of cash that's doing
nothing. And they they have asituation where they have
opportunities to invest inthings that pique their interest
outside of what I would callyour traditional or publicly
traded assets, especially as wesee well, I'm gonna put a pin on
that because we're gonna talkabout what you can actually
invest in within a self directedaccount. You mentioned self
(11:51):
directed IRA. Are there othertype of a other types of
retirement accounts that can beself directed?
And and if you had to describe,like, self what self directed
is, does that mean someone hasto do like, go to the bank and
do everything? Or or what iswhat is the VANA IRA how do they
partner with people to helpadminister that that account to
(12:13):
keep it in con compliance iswhat I'm saying.
Scott Maurer (12:16):
Yeah. So the the key thing to note is the word
self directed is referring towhat you can invest in or how
you can control your account. Attheir core, a self directed
account is still, from a taxperspective, a traditional IRA
or a Roth IRA or a SEP IRA ifyou're self employed. It could
be a solo four zero one k planif you're self employed and
(12:38):
wanna start your own your ownfour zero one k and and make
larger contributions. So selfdirected just just saying, you
can invest in the things thatyou know that you can control,
that that you understand.
But, again, tax wise at theircore, it's traditional IRAs.
It's Roth accounts, SEPs, solofour zero one k's, any former
employer's plan. So if you havean old four zero one k, an old
four zero three b plan, througha prior employer, those monies
(13:02):
can be rolled over, into an anIRA account as well with zero
tax consequence and theninvested. So I think that's
that's a very important thing Ithink where people miss is they
think self directed, that's acertain type of IRA, and it's
not. It's I mean, our ourpaperwork, when you sign up an
account, you check a box fortraditionally.
You check a box for Roth. It'sjust gonna be what those
investment options are.
Chris Picciurro, CPA (13:22):
So you've got SEP, Solo, Roth,
traditional, and I believesimple, we can't do self
directed at this point. Is thatNo. You you can self
Scott Maurer (13:31):
I I forgot. You can self direct to simple.
Chris Picciurro, CPA (13:33):
Just no. Okay. Cool. Yeah. Mhmm.
I learned something. Alright. Ilearned a lot. I I've always
learned stuff. That's cool.
Okay. So you could and so, also,you know, I know you can roll
money over from anotherretirement account, which is
typically the way that they getfunded. Can can taxpayers
contribute to these accountslike normal IRAs?
Scott Maurer (13:52):
Yeah. They again, the the IRAs that we hold
operate the exact same as anyother IRA. So the contribution
limits, the distribution rules,everything is the exact same.
The only difference is the typeof investments that you're
placing inside the IRA account.That's, again, what you
mentioned.
That's what we do at Advance IRAwhen you wanna invest in a piece
of real estate or you wannainvest into a private debt fund
(14:12):
or something like that. Our jobis to make sure that the
paperwork all gets preparedproperly in the name of your
IRA. Make sure you review andapprove it for us as well so
that, you know, thisdemonstrates very clearly to the
IRS that this asset, is insideof your IRA and therefore not
taxable to you, to make theinvestment and then not taxable
on the returns that are comingback into the IRA account. So
Chris Picciurro, CPA (14:37):
what are some of the common, investments
that are made in a self directedretirement account? I mean,
obviously well, I'm gonna shutup and listen to because you're
seeing it on you and your teamare seeing it on a daily basis.
Scott Maurer (14:51):
Yeah. I mean, it's it's I mentioned I keep
mentioning real estate becausewe it is real estate heavy.
Probably a good 60 to 70% of theassets we hold are real estate
in nature, but that term meansso much to so many different
people. It's it's rentalproperties. It's rehabs.
It's tax liens and tax deeds.It's lending money from your IRA
to somebody else who's buyingreal estate, and you're IRA
(15:14):
acting as a bank. We've seen anincrease over the years in
people investing in, you know,multifamily and commercial
property where Mhmm. I don'thave enough on my IRA to buy,
and maybe I don't want to useall my IRA funds to buy a
rental, you know, three tworental property, but I'm happy
to put 50 or 100 k into somebodyelse's, you know, commercial ass
commercial asset Right. And thenjust share in the profit.
So a lot
John Tripolsky (15:35):
of real
Scott Maurer (15:35):
estate. Outside of real estate, we've seen, you
know, the the private LLCs,startup companies, your debt
fundings, startups, preciousmetals, people wanting to buy
physical gold and silver. We'vehad a large of our clients
invest in rights, oil and gasbonds, things like that as well.
(15:57):
Again Right. It's rather thanthe and the other thing I think
is important for people tounderstand, rather than trying
to see where do I get that listof all the possible investments,
the IRS list simply says youcannot invest in life insurance,
and you cannot invest in thingsthat are deemed to be a
collectible, like artwork andantiques.
So that's the IRS list. It's notall the things you can do. It's
(16:18):
simply you can't buy lifeinsurance, and you can't buy
collectibles. Gotcha.
John Tripolsky (16:23):
Which is a lot more clear when they do it that
way.
Scott Maurer (16:26):
Yes. Yeah. Exactly. Exactly.
Chris Picciurro, CPA (16:28):
That so you could and so I've are you
seeing more people invest indigital assets,
cryptocurrencies? And and ifthey are, they are you what's
that mix between Roth and andpretax accounts?
Scott Maurer (16:42):
Yeah. I mean, we certainly have it. I was gonna
mention as you're talking Italked the rule these rules were
written back in the midseventies, right, as far as what
you can and can't invest in. SoI don't know. I mean, maybe
someone back in the seventiessaid, hey.
One day there's gonna be an asssomething you can pay for that
you don't even have to see yourtouch. But, yeah, we have we
certainly have clients whoinvest some in crypto. As far as
the the, I guess, breakoutbetween Roth and tradition, I
(17:04):
don't have those numbers, but, Imean, in general, our assets and
I think this is kind of a goodthing for people to understand.
It's it's predominantlytraditional because that's where
more people have some of theirmoney, but there's a fair number
of of Roth. But for peopledeciding when they wanna make an
investment, it's it's more so Isee an investment opportunity,
and I wanna make this.
I wanna take advantage of it,and this is where my retirement
(17:25):
funds are. They're in atraditional IRA or they're in a
Roth IRA, and I wanna I don'twanna miss out on this
investment. So it's but, yeah,there's certainly circumstances
when, you know, people who arepredicting a large return. Years
ago, we had a insurancecompanies a startup insurance
company. People wanted to investtheir Roth IRA into that startup
company because they knew whenit went public, they were gonna
(17:47):
double or triple their money.
That was all gonna be tax freeinside the Roth. So some people
invested their traditional fundin it, but, yeah, that was a
strategy. But, certainly,digital assets is something
we've definitely seen arise inthe last few years.
Chris Picciurro, CPA: Absolutely. And I'm you know, (18:00):
undefined
the cool thing with this is ifyou've got you know, obviously,
do your due diligence, but youthis this self directed account
can invest in LLC. So let's say,John, you wanna start a car
wash, and you Hey. Lisa's not a
John Tripolsky (18:17):
you know, I don't wanna invest in another
Afghan business.
Chris Picciurro, CPA (18:20):
No. I'm gonna make it more money.
John Tripolsky (18:21):
Hey. Let's say we own that one. Remember from,
like, 10 podcasts. Be like, Idon't wanna invest in another
one. I want a 100% market share.
Is is that's that's the wholedeal behind it, is I don't want
any comp competition. So let'shear about your car wash.
Chris Picciurro, CPA (18:33):
But let's say you wanted you wanted your
car wash and I wanted a I wannainvest a $100,000. I could use
my I could roll that money frommy, you know, simple IRA into a
self directed IRA, and then myIRA own the LLC interest. And
that could you know, if I thatthat could be that that could be
(18:54):
beneficial for all of us. Imean, because if I took it out
of that IRA, like I said, Iwould IRA, I'd be paying a
significant tax on it. Thatbeing said, Scott, there are
some rules with withdisqualified persons.
John and I are not related.Thank goodness. Our family
(19:14):
gatherings would be really amess.
Scott Maurer (19:17):
What are some of the rules get
John Tripolsky (19:18):
kicked out of the of Thanksgiving.
Chris Picciurro, CPA (19:21):
Yeah. Self dealings and and, you know, who
you can be partnering up withand investing with? Because a
lot of investments occur betweenfamilies and spouses and all
this other stuff.
Scott Maurer (19:30):
Yeah. So it's the rules are no collectibles and no
life insurance. Then the otherarena is your IRA cannot
transact with or benefit adisqualified person. And very
simply, the the disqualifiedpersons for your IRA, if it's
your IRA account, you and yourspouse, your parents and
grandparents, your kids andgrandkids, and any business or
(19:51):
entity owned by one of parties.So in in layman's terms, my IRA
can't lend me money.
My IRA cannot lend my son money.My IRA cannot buy a house and
lease it to one of thoseindividuals. My IRA cannot buy a
piece of real estate that one ofthose individuals wants to live
in or get any use out of. Sothose rules definitely pop up.
If it was a a business, youknow, startup, your IRA can't
(20:13):
invest in your son's business.
So there's definitely somerules, but that's it. It's
really up and down your linealtree. Brothers and sisters, your
IRA can can invest with on a aslong as you're doing on an arm's
length basis.
Chris Picciurro, CPA (20:25):
Mhmm.
Scott Maurer (20:26):
But that that's a key thing to keep in mind when
you're when you start talkingabout family and retirement
accounts, things can get alittle tricky and sticky and and
maybe not possible. That'sthat's what we're here for,
obviously. When you have thosequestions, call us. Let's walk
through the scenario, and kindaI can let you know my thoughts
on it and whether or not youneed to seek other advice.
John Tripolsky (20:43):
And, Scott, a question for you too. So this is
I mean, obviously, we're talkingabout, you know, some of the,
rules and regs from this beingwritten in the seventies. Right?
So so think about that, youknow, for somebody younger.
Right?
Like, that basically predatesbottled water. Right? Like,
before there was bottle beingsold to you or water being sold
to you in a bottle, some of thiswas written. But the reason why
I say that, right, is do haveyou seen a lot of changes just
(21:06):
with the, really just theInternet being available to
people, apps, like, as a whole.Right?
Like, you talk about, you know,going back in time. Right?
Somebody might have been sittingthere waiting to open the mail
that usually shows up at theirdoor the fifth or sixth of the
month that has their statementin it, where I couldn't tell you
the last time I actually got aphysical statement that I opened
(21:27):
and looked at for one onanything, if I even get one. So,
really, the, the availability oftechnology. Again, do you find
people are much more inclined towant to even if they don't, you
know, go into self directed youknow, the self directed route?
Do you think that they're,obviously, the ability to do it
is different? But, like, how doyou think technology and tech as
(21:49):
a whole has really impactedthat? Yeah. I mean, I I think
Changed it.
Scott Maurer (21:53):
Of on a micro level, we've had clients who've
invested in tech technologyfirms or apps even. Like, there
have been there's one client ofours. I know this his strategy
is he invested in, like, six orseven different little tiny
startups, which some of whichwere just, like, new apps for
parents to use for their kidsand things like that. And, he
knows that some of them aren'tgonna work out, but he know he's
hoping that a couple of them aregonna hit home runs, and there's
(22:15):
there's his gain. And I think ona bigger on a different scale
is, I think, as youngergenerations are looking to come
into this know, come intoindustries and and raise
capital, they're not alwayslooking for the traditional
funding mechanisms that, youknow, the us or our parents are
probably looking at.
So I think that's where selfdirected IRAs can be enticing
them. It's something new. It'ssomething different, and they're
(22:36):
they're kinda teaching the olddog new tricks when they're
talking to their investors of ofhere's how you can utilize some
of that capital, and realizingthey're real they're, you know,
the they're smart enough toknow, like, hey. This is a you
know, trillions and trillions ofdollars in retirement accounts
they might have access to ifthey can show people how to use
it. So from that standpoint, Ithink the the technology and
that kind of revolution hascertainly helped our industry
(23:00):
because people are it just is isopening people's eyes.
Hey. Things are different.Things are new, across all all
spectrums.
John Tripolsky (23:07):
And even just learning of new opportunities.
Right?
Chris Picciurro, CPA (23:10):
Like, back
John Tripolsky (23:10):
in the day, you might you might only hear of
companies starting within a a100 mile radius. Now it's you
know, it depends on where youconsume your news at. It's you
could find anything andeverything that, you know, what
went public two minutes ago. Ornope. This one's not.
This one just started. Somebodyjust started this and kind of
your, your overall reach is nowunlimited Oh, yeah. Globally.
Scott Maurer (23:33):
In that realm, I mean, you know, the the reels
that are out there, the littlevideos you get before you click
on YouTube and things like that,they're I've definitely seen a
lot of, people that use ourservices and and companies that
refer people to us and othersimilar industries using that as
added advertising. And a lotsometimes they'll even say, hey.
This isn't, you know, perfectfor a self directed IRA or is
(23:54):
IRA eligible investments, thingslike that. So, yep, definitely
utilizing that. Like you said,getting that out.
Yeah. How would you have foundout about a multifamily
partnership investment, youknow, twenty years Might have
had to know somebody or go tothe steak dinner, right, at the
at the at the hotel or whatnotto be invited. Now it's like,
oh, you just you look on socialmedia, and there's a little ad
(24:14):
talking about it. You know? Andyou probably have to do your
research on what an accreditedinvestor is and how do I get
into it and do my due diligenceon the investment, but it's
opening people's ideas for for alot more out there.
Chris Picciurro, CPA (24:26):
Well, I wanna touch wrap up by touching
on a couple not as fun points,but some compliance driven
points when it comes to selfdirected IRAs. And one of the
reasons you do wanna work with acompany like Advanta, you know,
transparently, we've got I mean,I have a real estate kinda
syndication I put together tenyears ago, and I've got a few
people that did invest within aself directed IRA, and it's That
(24:50):
being said, sometimes taxpayerslike to take things into their
own hands. And I can't tell youhow many times I've heard now,
not our clients, thankfully,people would say, oh, I'm gonna
run a $10.31 exchange. Really?Great.
Yeah. I sold my property. I justput the money in my bank
account, but I'm gonna get aqualified intermediary when I'm
ready. It doesn't work that way.Right?
So in as far as self directedIRAs, can you talk a little bit,
(25:16):
about what the custodianrequirement is, and it which is
really there to protect someonefrom themselves? And then
finally, this really isn't aquestion, but I I think it is
important to to note that I likeusing the self directed IRA with
more more a more traditionalIRA, for lack of a better term,
(25:37):
because sometimes you you don'twant all of your assets in, in
something that might not be asliquid as you'd like. Right?
Because those required minimumdistribution rules apply. So
having maybe an IRA accountthat's more liquid to kinda take
those RMDs because you don'twanna have to sell your property
in your in your self directedIRA in a distressed situation
because you need need the money.
(25:58):
But Sure. But, yeah, I I mean,the you know, so maybe practical
tips for people, juggling RMDsand then the custodial,
requirement.
Scott Maurer (26:09):
Yeah. So the the custodial requirement for for
any retirement account, anyqualified account, you have to
have a qualified custodian or ortrustee. So you can't simply go
to a bank account and tell themto when they say, hey. What's
this new account open as? Theyjust say it's My IRA.
Like, it it you have to have anaccount through a bank, a trust
company, brokerage firms,etcetera, that are going to do
(26:32):
the IRS reporting that areactually qualified and able to
report to the IRS, yourcontributions, your
distributions, your annualvaluation. So you do have to
have a custodian, someone likeAdana, someone like Charles
Schwab, who's going to do thatreporting and and catalog and
report the the those ask thosethose items back to the IRS on
an annual basis. So you can'tjust simply have you you can't
(26:53):
just say, I I created my ownIRA. This is the account I'm
using for it. So there there areways that we that's definitely
something to call me about.
There's ways you can get morecontrol over your funds by
utilizing LLCs and trusts. Youstill have to have a custodian
that who's gonna do thereporting on it. So that's just
an important note. Like I said,that's people shouldn't be doing
that themselves. They have touse a a a qualified custodian to
(27:14):
do it.
That's that's the role we serve.The RMD issue is definitely a
good one to consider. I thinkthat's know, when you invest in
things that are self directed,it's, you know, pieces of real
estate, private partnerships.They are not liquid. You can't
just sell them like you can astock or mutual fund.
So if you're getting to the ageof 73, we're getting close and
you're like, hey. I'm I'm gonnahave to start taking required
(27:37):
distribution for my regular IRAaccount, per IRS rules, you
wanna make sure you have theability to draw that RMD out
from some source. Now if yourself directed asset is producing
enough cash every year that youcan meet the RMD from there,
great. If not, you're gonnawanna be said like, Chris, have
another IRA where you cansatisfy that RMD from and not
have to mess with that illiquidasset inside the the self
(27:59):
directed account.
Chris Picciurro, CPA (28:00):
Right.
Scott Maurer (28:01):
That's just proper planning. That's something that
people would go to you for andsay, let's make sure we do this
right too. Really? Yes.
Chris Picciurro, CPA (28:08):
Well, no. I appreciate it. Go ahead, John.
Scott Maurer (28:11):
I'm sorry.
John Tripolsky (28:11):
No. No. Was gonna say this is great having
you back, man, and we'll we'llhave to make a better habit
about this and not wait twoyears
Chris Picciurro, CPA (28:18):
to get back in the shower.
Scott Maurer (28:19):
Yeah. Anytime. If you have, you wanna yeah. Have
me on talk about the thecheckbook route or just other
areas. There there are definitelittle intricacies and things
that people that come up thatpeople need to know about and
and and whatnot outside just ageneral overview.
So, yeah, happy to come backanytime.
Chris Picciurro, CPA (28:33):
I'm gonna get greedy for a second. I'm
sorry. I know we're we'resupposed to let Scott go, but
can you just touch on the youknow, within a self directed
retirement account, there are acouple options as far as, you
know, this could be a wholeanother piece of content, but,
the checkbook versus non versenoncheckbook and and and which
(28:53):
one is better? Because I I couldtell you that I've seen a big
spike in private lending throughthe self directed retirement
accounts. Yeah.
Can you kinda give us an becausesome people do hear they might
say, I've got a checkbook IRA.Well, they don't realize that's
a type of self directed IRA.
John Tripolsky (29:09):
Correct.
Scott Maurer (29:09):
Right. Yep. So the the checkbook structured did we
first talk about what I wouldcall the custodial IRA, which is
someone sets up an account withus and they wanna do private
lending through their IRA? Theycontact us. They tell us who
their borrower is.
They tell us how much it is theywanna lend, and our job is to
make sure that the loandocuments are properly prepared,
make sure the clients approvedit, of the investment before we
(29:31):
send cash out of the IRA to theclosing agent to close that
private loan, and then theborrower's payments all come
back to Advanta for deposits tothe client's accounts. That's
really you know, we're handlingthe money in and out of the
account. You're still directingthe activity, but we have
control, I guess, over the cashor the checkbook. So now
checkbook IRA, now maybe we needto change this term, talk about
technology, how many people areusing checkbooks anymore, but
(29:53):
that's the terminology that'sused, where you can set up an
LLC or a private trust where theowner of that LLC is your IRA
account, and you can directAdvanta to fund a bank account
in the name of that LLC. And ifyou're the manager of that LLC,
you can now make all of yourprivate loan investments in and
(30:13):
out of that LLC bank account.
So you have much more controlover the cash, making the
investments. You're nowresponsible for the
recordkeeping. Advanta is stillthere as a custodian, but your
IRA instead of hand holding alitany of private loans, we are
holding the membership in theLLC. So we're still reporting to
the IRS on that, but you havemuch more control as manager of
(30:36):
the LLC. Enough control to dowhat you wanna do, enough
control to hang yourself ifyou're not careful.
So that's something you wannamake sure you're you're well
aware of when you're doing, butthat's just a different strategy
that people use to to take thatlevel of control to the next
level.
John Tripolsky (30:49):
I I got my trusty old pen out. Here I am
learning things today, like backin school. So I'm glad you
reined into that. Mean, they're,discuss that. That's actually a
good one that I bet a lot ofpeople don't know about.
I think that's something too. Soand it's probably probably a
decent place to to end it up. Wedon't wanna give away all the
secrets in one discussion. But,yes, Scott, we'll we'll have you
back there. We'll, you know,either do a a take this one step
(31:12):
further either on a podcast oreven if we do some little
breakout sessions, I think we'llbe able to to get some good
stuff out with people, and Ilook forward to that.
Scott Maurer (31:19):
Great. Yeah. Looking forward to it, guys. Let
me know when.
John Tripolsky (31:22):
Absolutely. Absolutely. Well, we'll let you
off the hook this time. But,again, we'll have you back on so
you can't can't get away thateasy again. But and and
honestly, anybody that'slistening or watching this,
obviously, on YouTube, if you'relistening, you're missing out on
something great.
You can stare at Chris theentire time. Right? So hop on
YouTube. Subscribe to that.Again, if you have any
questions, we'll drop someresources here in the show notes
(31:44):
for you.
If you're on YouTube, it's rightthere. If you're somewhere else,
it's probably on that side overthere. But check it out. Don't
be lazy. Click on thoseresources.
Do not forget to subscribe tothis channel specifically. We
have amazing, amazing contentout here. I think we just passed
over, about 500 videos, piecesof content that we've put on
YouTube specifically. So do themath. That's a lot of stuff.
(32:07):
A lot of stuff you can searchthrough as well as we're working
on a couple, we can call themlittle top secret projects. But
before we even say anythingabout them, we'll let you go
too. Thank you again everybodyfor joining us here on the
teaching tax flow podcast. We'llsee you again next week.
Different date, same day of theweek, completely different
topic.
Have a good week, everybody.
Disclaimer (32:30):
The content provided is for educational purposes
only. We encourage you to seekpersonalized investment advice
from your financialprofessional. For all tax and
legal advice, please consultyour CPA or attorney. Investment
advisory services are offeredthrough Cabin Advisors, a
registered investment advisor.Securities are offered through
Cabin Securities, a registeredbroker dealer.
The content of this podcast doesnot constitute an offer of
(32:51):
securities. Offerings can onlybe made through an offering
memorandum, and you shouldcarefully examine the risk
factors and other informationcontained in the memorandum.
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