[HoosierBuddy]

I was checking out the earlier post on Auction # 1835640246. The only way I could afford anything like that would be to liquidate my IRA...but I can't do that because the taxes would eat half of it (10% penalty + fed and state income tax).

Now I'm thinking (dangerous I know) that this type of car is an investment. And aren't investments what we do with our IRAs? Do you think it's possible to set up ownership of a car into your IRA? I'm serious about this. I'd rather own a 1968 R code any day, then 1000 shares of some mutual fund.

Can this be done?

Phil

 

[MYTOYS]

Phil, I would think yes it could be done, but dam man think hard before you do it. Could you actually leave the car just sitting there, one thing never to mess with is our retirement good old uncle sams not going to take care of us.

Of course check with tax Professional than double check before you do anything.

Mark

 

[NRiley]

As a tax attorney, I can tell you that this is a nice idea to forget.

 

[camachinist]

I would imagine the only way it could be done is if a regulated financial company sold shares in a portfolio of classic/antique vehicles and qualified the investment for IRA use, much like some REIT's are qualified.
Most likely it would be done by purchasing shares of a publicly traded company which bought and sold such vehicles for a profit.

It's that held in trust, disinterested third party thing that trips up owning horses, cars, boats, houses, etc (directly) as retirement assets.

A much better approach would be to start a for-profit business in restoring old cars, much like Doug has done. Personally, my machine shop is an outgrowth of my intitial business of drag racing and doing work for other racers. Trust me, racing (for profit) is a great business, tax-wise...

Nice idea....appreciate your creativity..*G*

 

[dickson]

Great idea, but relatively illiquid asset, and hard to value...

You'd be surprised what some guys want to put in their retirement plans.....

If you're serious, I'd contact your IRA provider to see what they say.....Also, you could try Trustar / Delaware Charter Guarantee & Trust Co......(PM me if you want the number) - They are the largest non-depository Trust Co. in the US, and may be your best bet.....Dickson

 

[Teebone]

NO!..But I admire your creativity

 

[Guest]

Look at page 39-40 here:

http://www.irs.gov/pub/irs-pdf/p590.pdf

Basically, the rule says that if you invest in collectibles then the money used is considered a distribution (no more tax benefit) and you may have to pay the 10% penalty too (if you're not old enough to withdraw). I suppose if the money is considered a distribution then there would be issues getting the $$ back into the IRA after you realize this is a bad idea.

 

[sixtynine500]

every time i get a idea like this about tax dollars,wifes says something about visting me in jail? i think this has that kinda potental to,i like it!!!!here's a idea (seriously)start a sole proprieter bussiness (i'm sure you got some old car parts to get started] borrow against your ira,to buy "inventory aka 68 428 car" make payments back to your ira while deducting the intrest as a bussiness expense!!!!!while writing off your insurance and storage cost on your inv. [gosh i hope that cell has a nice view overlooking the lake.......]

 

[NRiley]

Phil: My short answer was to forget it. But it is an intriguing idea. The problem is that you would want to license and drive the car, so you probably can not put the car in the IRA. You MIGHT be able to borrow the money from your IRA to purchase the car in your name. Basically, your IRA would act as a lending bank, and be repaid with interest. I seem to remenber a federal case years and years ago where a person borrowed from his IRA to purchase a residence. The IRS declared this to be a taxable event, but lost on appeal. However, the law may have changed since then. I could not find any federal case where this was done for a car. If you are intested, you need to have this concept researched by a tax professional, obtain an opinion letter from the IRS, and draft the loan papers. You might try going to a law school that has a related tax course and ask the professor to take this on as a project.

 

[HoosierBuddy]

Thanks everyone for your replies.

Phil