What are the IRS rules regarding owning livestock, cattle, or racehorses in my Self-Directed IRA account?

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As long as you remain "at arm's length" and refrain from engaging in prohibited transactions, you can invest in animals and farmland with your Rocket Dollar account.


Livestock can be a profitable investment and is a popular Self-Directed investment in farming communities and Rocket Dollar's home state of Texas. Be sure to properly categorize all ownership documents of each animal within your IRA.


Here are a few important things to keep in mind to not engage in a prohibited transaction.

  • Your IRA can't buy any livestock that you already own in your name.
  • You must hold your livestock at another farm or one not owned by a disqualified person. Livestock cannot stay at your own personally owned farm. 
  • Always use a hired farmhand, transportation, or butcher when dealing with the animals on a day-to-day basis. You can oversee this work, but must not perform the work yourself.
  • You can't take one of your IRA's animals for your own food, your own competition/race, or personal benefit unless you distribute it from your retirement account. A farmhand or proper manager should handle these engagements and they should not directly relate back to your benefit. Competition animals can compete, but your IRA must be the only party benefiting from their success. 
  • All revenue generated from the animals must return to the IRA.

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