Does the IRS publish a list of approved SDIRA investments?

No. The IRS publishes a list of prohibited assets and prohibited transaction rules. Everything not on the prohibited list is permissible. The burden is on the account holder to ensure their investments comply — the custodian holds assets and executes transactions but does not provide investment advice or evaluate compliance.

Can I hold cryptocurrency in a self-directed IRA?

Yes. Cryptocurrency can be held in a self-directed IRA through a custodian that supports digital assets. The IRA holds the cryptocurrency; gains and income compound inside the account under normal IRA tax rules.

Can I invest in a startup through my IRA?

Yes, if the startup is structured as a C-corporation, LLC, or limited partnership (not an S-corporation). The IRA purchases shares or a membership interest. Prohibited transaction rules apply — you cannot invest in a startup you own or control, or in which a disqualified person has a significant interest.

What is the difference between prohibited assets and prohibited transactions?

Prohibited assets are specific investment types the IRS has barred from IRAs — life insurance, collectibles, and S-corp stock. Prohibited transactions are dealings that constitute self-dealing, regardless of the asset type. An investment can be in a permissible asset class and still be a prohibited transaction if it involves disqualified persons.

Can I hold gold in my IRA at home?

No. IRS-approved precious metals held in an IRA must be stored at an approved depository. Holding IRA gold at home or in a personal safe is a prohibited transaction — the IRS considers it a distribution of the asset from the account.

Who decides what my self-directed IRA can invest in?

You do — that is the defining feature of a self-directed IRA. The custodian holds and administers the assets but does not evaluate investment merit or advise on compliance. The account holder is responsible for ensuring investments are permissible and transactions comply with IRS rules. Most SDIRA investors work with a financial advisor who helps identify and evaluate opportunities.

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SDIRAAlternative InvestmentsRetirement

What Alternative Investments Are Actually Allowed in an IRA?

The IRS does not publish a list of approved IRA investments. It publishes a short list of what is prohibited. Everything else is permitted.

A self-directed IRA can hold a broad range of assets. Understanding exactly what's permitted — and the short list of what isn't — is the starting point for putting that flexibility to work.

The IRS's Approach: A Short List of What's Not Allowed

The IRS prohibits two categories of things inside an IRA:

Prohibited assets — specific investment types the IRS has explicitly barred
Prohibited transactions — dealings that involve self-dealing or benefit to disqualified persons, regardless of asset type

Everything outside those two categories is permissible inside a self-directed IRA.

What a Self-Directed IRA Can Hold

Private Equity and Venture Capital

Ownership stakes in private companies — growth equity, buyout fund LP interests, venture capital funds, co-investments, and secondary fund interests. The IRA holds the LP interest or membership units. All distributions flow back into the account.

See: Private Equity in Your IRA: What You Need to Know

Real Estate

Direct ownership of residential and commercial property, raw land, tax liens, mortgage notes, real estate syndications, and real estate funds. The IRA is the owner of record. All rent, income, and sale proceeds return to the account.

See: Can You Invest in Real Estate With Your IRA?

Private Credit and Debt Instruments

Promissory notes, direct loans, mortgage notes, bridge loans, mezzanine debt, and interests in private credit funds. The IRA acts as the lender; interest payments flow back into the account.

See: Private Credit in a Self-Directed IRA

Precious Metals

Gold, silver, platinum, and palladium that meet IRS purity standards (generally .995 fine or higher for gold; .999 for silver, platinum, and palladium). The metals must be held by an IRS-approved depository — not in your personal possession. Certain government-minted coins are also permitted.

Cryptocurrency

Digital assets held through a qualified SDIRA custodian that supports cryptocurrency. The IRA holds the digital assets; the custodian maintains custody.

Tax Liens and Tax Deeds

Certificates issued by local governments for delinquent property taxes. An SDIRA can purchase these certificates and earn interest, or potentially acquire the underlying property if the lien goes unredeemed.

Private Placements and LLCs

Investments in private companies or funds through Regulation D offerings, and membership interests in LLCs. A common structure is a checkbook IRA — an LLC owned by the SDIRA — that allows the account holder to execute investments directly without routing each transaction through the custodian.

What a Self-Directed IRA Cannot Hold

The IRS explicitly prohibits three categories of assets inside an IRA:

Life insurance contracts

Permanent life insurance policies — whole life, universal life — cannot be held inside an IRA. Term life insurance is also prohibited.

Collectibles

Art, antiques, rugs, gems, stamps, coins classified as collectibles, alcoholic beverages, and most tangible personal property valued for its rarity or aesthetic qualities. Exception: certain government-minted gold, silver, platinum, and palladium coins are not considered collectibles and are permitted.

S-corporation stock

IRAs are not eligible S-corporation shareholders under IRS rules. An IRA cannot hold shares in an S-corporation.

Prohibited Transactions: What the IRA Cannot Do

Beyond prohibited assets, the IRS prohibits certain transactions regardless of asset type. These rules exist to prevent self-dealing — using the IRA for your personal benefit before retirement.

Who is a disqualified person?

You (the IRA owner), your spouse, your children and their spouses, your parents, fiduciaries of the IRA, and any entity in which you or the above own 50% or more.

Selling property you own to your IRA (or buying IRA property for yourself)
Lending IRA money to yourself or a disqualified person
Using IRA assets as personal collateral
Receiving compensation for services rendered to the IRA
Investing IRA funds in a company you control

Violating the prohibited transaction rules is severe: the entire IRA can be treated as a taxable distribution in the year of the transaction, triggering income taxes and potentially a 10% early withdrawal penalty.

Frequently Asked Questions

This guide is for informational purposes only and does not constitute tax or legal advice. IRS rules governing self-directed IRAs are complex and subject to change. Consult a qualified financial advisor, CPA, and attorney before investing.