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Investing in Oil and Gas using a Self-Directed IRA

Investing in Oil and Gas Using a Self-Directed IRA

Self-directed IRAs have become a popular investment vehicle for investors looking to purchase alternative assets outside of the typical stocks, bonds, and mutual funds. Since IRAs were established in 1974, more people are becoming aware of the benefits they have to offer. Unlike a typical IRA or 401(k), a self-directed IRA gives investors the opportunity to invest in real estate, futures & forex, precious metals, mortgage notes, and oil and gas assets all while building a tax-sheltered income.

Investments in oil and gas are one example of alternative assets investors acquire to add diversity to their retirement portfolios.

How can you invest in oil and gas with your Midland self-directed IRA?

  • Invest in land being explored for these minerals
  • Invest in mineral rights of land being explored
  • Purchase interests in oil and gas refineries and/or drilling companies
  • Acquire commodities and/or futures contracts

Your self-directed IRA can also invest in other energy investments including:

  • Wind and solar options
  • Hydroelectric energy, hydropower, and wave power
  • Natural gas and coal
  • Geothermal energy
  • Biofuel

Midland Trust makes the process of investing in these alternative assets inside of your self-directed IRA just as simple as investing outside of your IRA. However, with a self-directed IRA, you enjoy the benefits of a tax-sheltered account. Below are the steps to invest in oil and gas with your self-directed IRA.

  1. Fill out a Midland Trust application
  2. Fund your Midland IRA account by…
    1. Making a personal contribution
    2. IRA to IRA transfer
    3. 401(k) to IRA rollover
  3. Fill out Midland’s Private Purchase Authorization Form
  4. Provide Midland with the investment documents from the energy company such as the Subscription Agreement. The vesting on the documents will be Midland Trust, Inc. FBO Client’s Name and IRA Number.
  5. Your IRA is now invested in oil and gas assets and all income is deposited into your IRA tax-free.

Before you invest in any asset make sure you do your due diligence by researching the investment options thoroughly to avoid fraud, understanding the benefits and risks of the investment, and consulting with financial, accounting, and industry professionals before making decisions.

To learn more contact Midland IRA at 239-333-1032 or visit www.MidlandTrust.com.

Note: You may be subject to unrelated business income tax (UBIT) if your IRA incurs a debt in order to acquire an asset, such as a loan from a bank. Midland IRA is not a fiduciary and does not endorse or sell investments. This article is for educational purposes only.