Are self directed IRAs about to be trampled due to the fight between the presidential candidates?
Some Democrats in the house just wrote a letter about self directed IRA valuations to the IRS and DOL requesting an evaluation as to whether there are any valuation games being played with the IRAs. Can’t imagine why the Democrats would be concerned by the issue all of a sudden.
So what does this mean for the mere commoners? Its probably going to be a dual edged sword.
This could be good in that custodians, along with the help of the IRA owners, are awful are reporting the true value of the IRA assets. Especially when the account has gone down to 0 due to the self directed investment blowing up or being a ponzi scheme. Custodians want to keep on getting their fees and some get fees based upon the value of the IRA account. Thus the desire on the part of the custodians to over value the account. If the IRS or DOL cracks down on valuations in self directed IRAs, this should be helpful to those who saw their asset values vaporize.
This is going to be bad for aggressive/creative IRA owners if they are going to be required to have formal valuations done on the IRA assets. All of a sudden transaction fees are going to increase quite a bit and some people may not want to do any deal that doesn’t have an easy to determine market value. In other words another way the IRS can attack self directed IRA transactions.