--- title: What types of transactions are allowed in an SDIRA? description: Help Center --- [Skip to content](https://support.aetrust.com/what-types-of-transactions-are-allowed-in-an-sdira#main-content) English Show submenu for translations [More support](https://support.aetrust.com/kb-tickets/new?hsLang=en) [Customer portal](https://cs.aetrust.com/tickets-view?hsLang=en) [![American Estate & Trust](https://support.aetrust.com/hubfs/Website%20Assets/Logo%20Assets/logo-text.svg)](https://support.aetrust.com/?hsLang=en) Open main navigation Close main navigation - English Show submenu for translations - [More support](https://support.aetrust.com/kb-tickets/new) - [Customer portal](https://cs.aetrust.com/tickets-view) - [Contact us](https://aetrust.com/contact) [Contact us](https://aetrust.com/contact) How can we help you? - There are no suggestions because the search field is empty. 1. [Help Center](https://support.aetrust.com/?hsLang=en) 2. [Investor Portal](https://support.aetrust.com/investor-portal?hsLang=en) 3. [Prohibited Transactions and Compliance](https://support.aetrust.com/investor-portal?hsLang=en#prohibited-transactions-and-compliance) # What types of transactions are allowed in an SDIRA? A **Self-Directed IRA (SDIRA)** provides account holders with the flexibility to invest in a wide range of alternative assets beyond traditional stocks and bonds. However, **not all transactions are allowed**, and certain IRS rules must be followed to maintain the account’s tax-advantaged status. Below, we’ll outline the types of transactions **permitted** in an SDIRA, along with guidelines to ensure compliance. ### **Permitted Transactions in an SDIRA** The **IRS does not provide a definitive list** of allowable investments but instead outlines certain **prohibited transactions**. This means that as long as an investment does not violate IRS rules, it is generally allowed. ### **1. Real Estate Investments** ✅ **Allowed:** - Purchasing **rental properties**, commercial real estate, raw land, or multi-family units. - Holding real estate as a **passive investment** within the SDIRA. - Using a **non-recourse loan** for real estate purchases (if permitted by the custodian). 🚫 **Not Allowed:** - Personally living in or using the property. - Buying from or selling to a **disqualified person** (e.g., yourself, spouse, parents, or children). ### **2. Private Equity & Private Stock** ✅ **Allowed:** - Investing in **startups, private companies, hedge funds, and venture capital** firms. - Purchasing **private stock** from businesses not publicly traded. 🚫 **Not Allowed:** - Investing in a company where you or a disqualified person **own 50% or more**. - Holding a **controlling interest** or receiving compensation from the company. ### **3. Private Lending (Notes & Mortgages)** ✅ **Allowed:** - Lending money through **promissory notes**. - Issuing **private mortgages** secured by real estate. - Investing in **peer-to-peer lending** platforms (if allowed by the custodian). 🚫 **Not Allowed:** - Lending to yourself, your spouse, or other **disqualified persons**. - Offering a **loan secured by personal assets**. ### **4. Precious Metals** ✅ **Allowed:** - Investing in **IRS-approved gold, silver, platinum, and palladium**. - Storing metals at an **approved depository**. 🚫 **Not Allowed:** - Holding metals **personally**. - Investing in collectibles such as **numismatic coins**. ### **5. Cryptocurrency** ✅ **Allowed:** - Purchasing **Bitcoin, Ethereum, and other cryptocurrencies** through an SDIRA. - Holding digital assets in an **approved wallet or exchange**. 🚫 **Not Allowed:** - Holding cryptocurrency in a **personal wallet**. - Transferring assets **outside of the SDIRA’s control**. ### **6. Tax Liens & Tax Deeds** ✅ **Allowed:** - Purchasing **tax liens or tax deeds** at auctions. - Receiving interest from **tax lien certificates**. 🚫 **Not Allowed:** - Buying tax liens from **disqualified persons**. - Using SDIRA-owned property for **personal benefit**. ### **7. Wholly-Owned LLCs ("Checkbook Control")** ✅ **Allowed:** - Establishing an **IRA-owned LLC** to streamline investment transactions. - Using an **LLC business checking account** to make purchases. 🚫 **Not Allowed:** - Paying yourself a **salary or compensation** from the LLC. - Taking **personal distributions** directly from the LLC instead of through the IRA. ### **Key Rules for SDIRA Transactions** To maintain the tax-advantaged status of your SDIRA, follow these **important rules**: ✔ **No Self-Dealing:** You cannot personally benefit from SDIRA assets. ✔ **No Transactions with Disqualified Persons:** Avoid dealings with family members and related entities. ✔ **All Transactions Must Be Passive:** You cannot actively perform work on SDIRA owned investments. ✔ **All Income & Expenses Must Flow Through the IRA:** Payments, earnings, and investment costs must be handled by the IRA, not your personal funds. ### **Final Thoughts** A Self-Directed IRA provides **greater investment flexibility**, but it requires careful management to avoid prohibited transactions. If you are unsure whether a transaction is allowed, consult **AET or a tax professional** before proceeding. - [Investor Portal](https://support.aetrust.com/investor-portal?hsLang=en#main-content) - [Online Portal](https://support.aetrust.com/investor-portal?hsLang=en#online-portal) - [Transfer-ins and Rollovers](https://support.aetrust.com/investor-portal?hsLang=en#transfer-ins-and-rollovers) - [General Account Questions](https://support.aetrust.com/investor-portal?hsLang=en#general-account-questions) - [Tax Reporting and Compliance](https://support.aetrust.com/investor-portal?hsLang=en#tax-reporting-and-compliance) - [Signing Request](https://support.aetrust.com/investor-portal?hsLang=en#signing-request) - [Bill Pay](https://support.aetrust.com/investor-portal?hsLang=en#bill-pay) - [Prohibited Transactions and Compliance](https://support.aetrust.com/investor-portal?hsLang=en#prohibited-transactions-and-compliance) - [Fees and Payments](https://support.aetrust.com/investor-portal?hsLang=en#fees-and-payments) - [Investment Questions](https://support.aetrust.com/investor-portal?hsLang=en#investment-questions) - [Account Closure and Transfer-out](https://support.aetrust.com/investor-portal?hsLang=en#account-closure-and-transfer-out) - [Assets](https://support.aetrust.com/investor-portal?hsLang=en#assets) - [Business Portal](https://support.aetrust.com/business-portal?hsLang=en#main-content) - [Getting started](https://support.aetrust.com/business-portal?hsLang=en#getting-started) - [FAQ](https://support.aetrust.com/business-portal?hsLang=en#faq) - [Training](https://support.aetrust.com/business-portal?hsLang=en#training) - [Investments](https://support.aetrust.com/business-portal?hsLang=en#investments) [![American Estate & Trust](https://support.aetrust.com/hubfs/Website%20Assets/Logo%20Assets/logo-text.svg "American Estate & Trust")](https://aetrust.com) [mailto:support@aetrust.com](mailto:support@aetrust.com) Copyright © 2025, American Estate & Trust