Silly but True Question!
A client of ours wants to know if he can roll money out of his IRA and into a Classic Car…yes, a Classic Car…without incurring any penalties or fees. Anyone know what the rules are for something like this?? Thanks!
A client of ours wants to know if he can roll money out of his IRA and into a Classic Car…yes, a Classic Car…without incurring any penalties or fees. Anyone know what the rules are for something like this?? Thanks!
Permalink Submitted by Alan Spross on Wed, 2008-11-12 03:29
There are two serious pitfalls here.
1) An IRA cannot hold collectibles, and an antique is considered a collectible along with artwork, gems, alcoholic beverages, stamps, coins metals, rugs, artwork etc. Sec 408(m) does not specifically list classic cars as collectibles, but does include similar property to the above, which would probably include a classic car.
2) Use of the car – any personal use of the car, such as exhibiting in parades, using for transportation etc is a prohibited transaction for an IRA. You cannot sell personally owned property to your IRA as that is self dealing and also prohibited.
So the IRA would have to buy the car from a non disqualified person, register it to the IRA, not use the car for any personal purposes, and then hope that the IRS does not consider the vehicle a collectible.