Investors who want to buy Treasury bills for individual retirement accounts (IRAs) should go to their broker, as it is not possible to finance an IRA through TreasuryDirect. Investors can also buy Treasury notes on the secondary market, although buying new issues is usually a smarter option. The IRS prohibits you from keeping certain types of assets within an IRA. First of all, any type of collector's item is prohibited, including not only things such as works of art and stamps, but also precious stones, gold ingots and (oddly enough) alcoholic beverages.
If you want to finance your retirement by selling the contents of your warehouse, you'll have to do it outside your IRA. It is true that interest income from treasury bills, promissory notes and bonds can evade state income tax. If inflation increases, your TIPS will grow dramatically, but you could end up with a fairly large tax bill as a result. Even qualified plans can also have almost any type of guarantee, although mutual funds, annuities and company stocks are usually the three main vehicles used in these plans for a variety of reasons.
Since all the investments in your Roth IRA grow without generating a current income tax, you don't file or pay interest taxes on Treasury bills like you would in a regular account. And since dividends are taxable, this can result in a substantial tax bill, but including the REIT in your IRA completely eliminates this particular disadvantage by protecting those dividends from taxes. If you want to include Treasury bills in your Roth IRA, you'll need to make sure that your custodian or trustee allows such investment. For example, REITs are a great way to venture into the real estate industry, but the law requires that they pay at least 90% of their annual taxable income to their shareholders in the form of dividends.
However, with the commercial annotation system, banks and brokerage companies can offer customers tradable securities, such as bills, promissory notes, bonds, inflation-protected Treasury securities (TIPS) and variable-rate notes to invest in an IRA. With just a few exceptions, you can choose anything from high-risk equity funds to low-risk Treasury bonds. Since Treasury bills are short-term investments, you can spend much of your time keeping track of their maturity or simply opt for TreasuryDirect's automatic reinvestment plan.