American IRA Publishes Self-Directed Real Estate IRAs and Insurance Guide

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Self-Directed Real Estate IRAs and Insurance can be difficult to understand—which is why American IRA recently released a blog post aimed at educating investors on these complex topics.

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American IRA CEO, Jim Hitt

it is essential to keep the account and one’s personal holdings separate

Holding real estate within a retirement account is a new concept to many—which is why it can be confusing. Self-Directed Real Estate IRAs come with rules such as prohibited transactions and working through a property manager to ensure the proper separation between owner and the investment property. That’s why many investors find it perplexing when trying to understand how real estate insurance might work within such an arrangement.

Recently, American IRA—a Self-Directed IRA administration firm based in Asheville, NC—released a blog post that detailed how real estate “IRAs” and insurance might work hand in hand. The post established some key points that investors should pay attention to. The first among these was that a Self-Directed IRA, not the individual investor, has to be the “payor and beneficiary of all insurance policies covering the property.” That means that the account is handling the expense of insurance—not the individual holding the account, from their own personal funds.

This point highlights a key distinction of owning real estate through a Self-Directed IRA: it is essential to keep the account and one’s personal holdings separate. In this way, a Self-Directed IRA—like any other IRA—is to serve as a separate entity.

The post went on to describe a range of other issues, such as having a Self-Directed Real Estate IRA administrator send in insurance premium payments. Sending in premiums from a personal checking account could threaten the tax-advantaged status of the investment. When this status is revoked by the IRS, investors could face major tax penalties.

Why does it matter? Real estate investors need to hold landlord insurance if they have tenants.

“There’s a lot to consider when holding real estate within a Self-Directed IRA,” noted Jim Hitt, the CEO of American IRA. “That’s why we recommend working with a qualified Self-Directed IRA administrator. Not only does that make it possible to send in valid premium payments, but it will help smooth over the entire process and ensure that all precautions are taken.”

For more information on Self-Directed Real Estate IRAs and insurance, visit American IRA’s site at or call 866-7500-IRA.

American IRA, LLC was established in 2004 by Jim Hitt, CEO in Asheville, NC.
The mission of American IRA is to provide the highest level of customer service in the self-directed retirement industry. Jim Hitt and his team have grown the company to over $400 million in assets under administration by educating the public that their Self-Directed IRA account can invest in a variety of assets such as real estate, private lending, limited liability companies, precious metals and much more.

As a Self-Directed IRA administrator, they are a neutral third party. They do not make any recommendations to any person or entity associated with investments of any type (including financial representatives, investment promoters or companies, or employees, agents or representatives associated with these firms). They are not responsible for and are not bound by any statements, representations, warranties or agreements made by any such person or entity and do not provide any recommendation on the quality profitability or reputability of any investment, individual or company. The term "they" refers to American IRA, located in Asheville and Charlotte, NC."

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