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If you have ever asked a question about your Self-Directed IRA and been told, “We can’t give tax advice,” you are not alone. This moment often creates confusion, frustration, or even concern for investors who are simply trying to do the right thing with their retirement account.
Understanding the difference between education and advice, and knowing which professionals are responsible for each, is one of the most important steps you can take to protect your Self-Directed IRA and make informed decisions.
Let’s start with the role of the custodian or administrator, because this is where most misunderstandings begin.
At Mountain West IRA, we serve as a Self-Directed IRA administrator. Our role is to hold and administer your retirement account and ensure that it operates within IRS rules. We process transactions at your direction, maintain required documentation, provide recordkeeping, and report required information to the IRS.
Think of the custodian or administrator as the operational backbone of your Self-Directed IRA. You make the investment decisions. We handle the administrative and compliance mechanics that allow those decisions to be carried out properly.
This is the most important distinction to understand.
The reason is straightforward. Custodians and administrators are not licensed to provide that type of advice. Mountain West IRA does not hold securities licenses, and our team members are not acting as CPAs, tax attorneys, or financial advisors. This separation is intentional and essential.
What custodians and administrators do provide is education, and there is a meaningful difference between education and advice.
Education explains how things work. It outlines processes, rules, and options without telling you what decision to make.
For example, we can explain how real estate is held inside a Self-Directed IRA, what paperwork is required, how income and expenses must flow through the account, and what the prohibited transaction rules are. What we cannot do is tell you whether real estate is a good choice for you or evaluate a specific property.
Education gives you the framework and understanding. Advice applies that information to your personal situation and recommends a specific course of action.
These boundaries exist to protect you.
First, regulatory compliance. Providing tax or financial advice without proper licensing violates state and federal regulations that are designed to protect retirement investors.
Second, avoiding conflicts of interest. If a custodian or administrator were recommending specific investments, you would reasonably question whether those recommendations were truly in your best interest. Clear boundaries remove that concern.
Third, matching expertise to the question being asked. Tax questions require tax expertise. Strategy questions require financial planning expertise. You want answers from professionals who are trained and legally authorized to give them.
This separation is not a limitation. It is a safeguard.
Tax advice should always be provided by a qualified CPA or tax attorney who understands ERISA regulations and how IRAs function, and who has the professional credentials to properly evaluate your specific financial situation.
Tax professionals can help you determine whether a Traditional or Roth IRA structure may make sense for you based on income, tax brackets, and long-term planning goals. They can also explain potential tax considerations tied to alternative assets, including situations where Unrelated Business Income Tax or Unrelated Debt Financed Income may apply.
They assist with contribution planning, distribution strategies, and understanding how retirement decisions interact with your broader tax picture.
Your custodian explains how contributions are made and how transactions are processed. Your tax professional helps you understand the tax impact of those decisions for your specific circumstances.
Financial advisors who hold the appropriate licenses can help with overall retirement strategy, asset allocation, and risk management. They look at your entire financial picture and help align your retirement planning with your goals, timeline, and comfort with risk.
It is important to note that not all financial advisors are familiar with Self-Directed IRAs or alternative assets. If you plan to invest in areas such as real estate, private lending, or precious metals, you may want to work with an advisor who understands alternative asset strategies.
Do you need a financial advisor to open or use a Self-Directed IRA? No. Many account holders direct their own investments based on personal knowledge and experience. However, if you want guidance at the strategy level, a qualified advisor can be a valuable part of your planning process.
Many successful Self-Directed IRA investors work with a team of professionals.
Your custodian or administrator handles administration and recordkeeping.
Your tax professional advises on tax implications.
Your financial advisor helps with strategy.
You may also work with specialists related to specific asset types.
You are the central decision maker. You gather education from your custodian, advice from your tax professional, and guidance from your financial advisor. Then you make the final decisions about your retirement assets.
A Self-Directed IRA gives you the ability to invest in assets such as real estate, precious metals, cryptocurrency, private placements, promissory notes, and private stock.
With that flexibility comes responsibility. Education is the foundation that supports informed decision making.
Mountain West IRA provides educational resources to help you understand how Self-Directed IRAs work and what options may be available. Your professional advisors help you apply that knowledge appropriately to your own situation.
Start with education. Learn how Self-Directed IRAs operate and understand the rules that apply. When you need advice, work with licensed professionals who can address your specific circumstances.
Education empowers you. Professional guidance supports you. Together, they help you take informed control of your retirement planning.
At Mountain West IRA, we specialize in Self-Directed IRAs that allow investments beyond the stock market into alternative assets. Whether you are exploring a pre-tax or post-tax retirement account, our team can help you understand how the process works.
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This post is for informational purposes only and should not be considered financial advice. Please consult with a financial advisor for personalized advice.
Mountain West IRA, Inc. does not render tax, legal, accounting, investment, or other professional advice. If accounting, tax, legal, investment, or other similar expert assistance is required, the services of a competent professional should be sought.
Meet with our team to explore your personalized journey of building wealth through investing in real estate, promissory notes, precious metals, and other assets using your retirement fund.
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