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Can I Invest In A DST Using My Self-Directed IRA?

Yes, it is possible to invest in a Delaware Statutory Trust (DST) using a self-directed Individual Retirement Account (IRA). However, there are certain rules and regulations that must be followed in order to ensure that the investment is done properly and in compliance with IRS guidelines.

Here are some important things to keep in mind when investing in a DST using your self-directed IRA:

  1. Your IRA custodian must allow for alternative investments: Not all IRA custodians allow for alternative investments such as DSTs, so it is important to check with your custodian first to see if they allow it.
  2. Your IRA must have sufficient funds to cover the investment: You cannot invest more than the amount of funds you have available in your IRA. It is important to carefully consider the amount you want to invest and ensure that you have enough funds in your IRA to cover it.
  3. The investment must be for the benefit of your IRA: All income and expenses related to the DST investment must flow in and out of your IRA. You cannot personally benefit from the investment until you reach retirement age and start taking distributions from your IRA.
  4. The DST investment must be passive: As the owner of the IRA, you cannot actively manage the DST investment. All management and decision-making must be done by the DST sponsor.
  5. You must follow all IRS guidelines: It is important to work with a qualified tax professional to ensure that you are following all IRS rules and regulations related to investing in a DST using your self-directed IRA.

Overall, investing in a DST using your self-directed IRA can be a great way to diversify your retirement portfolio and potentially earn a steady stream of passive income. However, it is important to do your due diligence and work with qualified professionals to ensure that you are making a sound investment and complying with all IRS rules and regulations.