Father’s Day is a special opportunity to honor the men who taught us so much. If your dad is anything like mine, he showed you how to wrap a worm around barbed steel, cast your line straight and true, and free a wriggling trout from a swallowed hook. This year, Father’s Day also falls on National Go Fishing Day, so what better time for the dads of America to teach their little ones about the joys of fishing? If the little ones aren’t so little anymore, bringing a replenished tackle box and a cooler of goodies to the lake can be a perfect way to spend Father’s Day weekend.
Fishing is a fun summertime activity, but elsewhere in the United States, it can be big business throughout the year. In Alaska, harvesters of the sea patrol for king, silver, and other species of salmon during the summer months, while the icy waters of the Bering Sea spawn king and snow crab for fall and winter fishing. Commercial fishing has been a lynchpin of Alaska’s economy for centuries. Large companies may deploy fleets of ships to collect their bounties, while smaller, family-owned operations can pursue their slices of the market by operating their own boats and crews.
Like any entrepreneurial endeavor, a fishing boat can be a self-directed investment in a retirement plan. Your fishing operation could exist as its own business in which income returns to the account and bears the applicable tax advantages of your plan. In turn, any expenses would have to be paid by your plan. Never having to worry about covering costs with your personal funds can prove especially beneficial in this context, as commercial boats can be lucrative but also expensive. Furthermore, any IRA or 401(k) proceeds that are applied toward expenses will never be taxed as distributions.
In accordance with the Internal Revenue Code, you would have to remain at arm’s length from day-to-day business activities. As the plan holder, you could appoint non-disqualified persons to carry out business operations, but you could not provide sweat equity or execute management duties yourself.
It may seem farfetched, but it’s easier than ever to incorporate private businesses into self-directed retirement plans. Education is key to understanding your alternative asset options, and we’re here to help whenever you’re ready to get started. For more information about your wide range of possibilities, please don’t hesitate to contact New Direction IRA.