Ira Investing in Silver and Gold

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					                                                       BULFAMANTE FINANCIAL
                                                                                               Protect Your IRA
                              SEBASTIAN BULFAMANTE
                              SEE OUR WEBSITE: WWW.BULFAMANTE.COM

                                                                                                                                     A PRIL 2008
  How to Make "Alternative" Investments in                                you may not be able to dip into your IRA for cash
                Your IRA                                                  anytime you please or easily make your annual MDR.2

Most IRA trustees handle only typical IRA investments                          You need to find the right trustee to handle your
such as mutual funds, stocks and bonds, certificates of
deposits, etc. They are leery of other investment types                        Some IRA trustees specialize in alternative
for fear of violating IRS rules 1 on prohibited investments               investments. You can locate some trustees by searching
and transactions. Such violations will cause you to lose                  the Internet using the key words "self-directed IRA." Do
your IRA tax benefits and trigger penalties.                              your due diligence to find who is reputable and then
                                                                          check their fee schedules. Alternative investments
     But alternative investments may interest you. If you
                                                                          inevitably cost more than the garden-variety investments.
wish to follow your interests, here are some facts and
issues to consider. Note that alternative investment                             Know the prohibited transaction rules.
offerings may carry significant risks, including high                          When investing in alternative investments, you need
volatility and lack of diversification.                                   to avoid the "prohibited transaction rules." These rules
      About the only investments prohibited for IRAs are                  are intended to prevent using your IRA account for "self-
life insurance policies and certain collectibles, such as                 dealing". You cannot use your IRA:
works of art, rugs, antiques, metals, gems, stamps, coins
                                                                                      To buy stock or other assets from you or sell
and alcoholic beverages. However, you can buy certain                                  them to you.
gold and silver coins minted by the U.S. or by U.S. states.
                                                                                      To lease assets from you or to you.
     So what's allowed?
                                                                                      To buy stock in a corporation in which you have
     A sample of alternative investments include: stock                                a controlling interest.
from an initial public offering, closely held stock, real
                                                                                      To lend to you or borrow from you.
estate, options to buy real estate, oil and gas royalty
interests, stock options, mortgages or other loans to be                              To engage in transactions with certain related
held for investment.                                                                   parties and/or family members.
                                                                             Avoid            "Unrelated       Business       Taxable      Income"
      You can see, some of these options are inherently
illiquid, which can cause problems. If you have too much
of your account balance tied up in illiquid investments,
                                                                                     Minimum Distribution Requirements due annually after reaching age
          IRS Pub 590 – outlines the banned investments and prohibited

                                                           Bulfamante Financial Serv ices
                                                 Securities offered thru Vanderbilt Securities LLC
     Certain types of income (not including investment            $125 to $1,750); and Pensco charges an annual
income) are prohibited in IRAs. The UBTI rules are                maintenance fee (it can range from $150 to $1,000). 1, 2
intended to prevent IRAs from investing in income-
                                                                       There is one thing to keep in mind if you are
producing businesses via direct ownership or via
                                                                  interested in using IRA assets to invest in real estate.
ownership of a partnership or LLC interest. An example
                                                                  There are some limitations, and a lack of understanding
might include using an IRA to buy an interest in a cattle-
                                                                  about them makes self-directed accounts accidents
breeding partnership.
                                                                  waiting to happen. The biggest risk is--what is usually
     Give us a call or fill out the reply coupon so we            referred to as ―self-dealing?‖ According to IRS
can help you find and overcome the hurdles of                     regulations, an IRA is supposed to provide income for
alternative investments in IRAs that are suited to you.           your retirement, not to cover your current living
                                                                  expenses. So, you cannot benefit now from an investment
   You CAN Invest Your IRA Assets in Real                         you make in real estate via a self-directed IRA. That
                  Estate                                          means you can buy property and rent it out to a stranger,
                                                                  but you cannot buy property and live in it yourself or rent
Most    investors believe that their only Individual              it out to a family member. If you do, the IRS could step
Retirement Account (IRA) investment options are mutual            in and disqualify the IRA, resulting in a large tax bill (as
funds and stocks—but you can also invest your IRA                 well as some penalties for account holders who are
assets in real estate, thanks to the ―self-directed‖ IRA.         younger than age 59½). In other words, you could lose
     Unlike traditional IRAs, self-directed IRAs enable           your IRA.
their owners to pursue a wide variety of investments,                   How do you avoid a mess like that? Get a good
including single-family homes, urban real estate                  financial advisor to guide you through the process of
developments, farms, liens, and mortgage notes. You can           setting up and administering a self-directed IRA. We can
even use the money to start a small business. The only            help you get advance approval from the Labor
things you cannot invest in are life insurance and certain        Department (which oversees pension plans) on any
collectibles.                                                     transaction which might be questionable. We can also
     Setting up a self-directed IRA is relatively simple.         help you separate your traditional IRA assets from your
You open an account with a custodian or administrator             self-directed IRA assets. That way, if you make a
that specializes in self-directed IRAs. You transfer assets       mistake, you aren’t putting your entire retirement in
from your traditional IRA to the new self-directed IRA.           jeopardy.
You then seek out investments, such as real estate. When              Call me or complete the attached reply coupon to
you are ready to make a purchase, you simply tell your            request some additional information.
custodian to cut the seller a check.

     Of course, self-directed IRAs are not free. Costs
                                                                         These articles are not intended to provide tax or legal advice
typically include an annual custodial fee and transaction         and should not be relied upon for such. They are summaries of our
                                                                  understanding and interpretation of some of the current laws and
fees. Two of the larger custodians—Entrust Group, based           regulations and are not exhaustive. Investors should consult their
in Oakland, California, and Pensco Trust Company,                 legal or tax advisor for advice and information concerning their
                                                                  particular circumstances.
based in San Francisco, California—both charge $50 to
open accounts. In addition, Entrust charges an annual
record-keeping fee based on asset size (it can range from

                                                   Bulfamante Financial Serv ices
                                         Securities offered thru Vanderbilt Securities LLC
                         Get this Valuable Free Information
                            Mail back to:

                            Bulfamante Financial Services
                            Phone: (914) 263-0107

    Please send me information on these items mentioned in your newsletter:

          Please send information on alternative IRA investments.
          I would like to invest my IRA in real estate.

    I would like to have a copy of these booklets (enclose $1 for each):

          Avoid Mistakes in Buying Long-Term Care Insurance
          Annuity Owner Opportunities: Tips and Ideas That Could Save You Thousands
          Understanding Mutual Funds
          Six Strategies to Help Retirees Reduce and Preserve Their Assets
          Helping You Avoid IRA Distribution Mistakes (And Reduce Your Taxes on IRA
          CD Shoppers’ Guide

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