Adam Bergman

Founder, Tax Lawyer, Author

Some of the best opportunities I see in the Self-Directed IRA space never make it to a public exchange. Real estate syndications, private equity funds, and early-stage companies raise money privately, and the SEC only opens that door to accredited investors. If you’re wondering whether your Self-Directed IRA accredited investor status is even possible, given that an IRA isn’t a person with a job or a bank account of its own, the short answer is yes, but the qualification runs through you, not the account.

Why the Accredited Investor Rules Exist

Private placements sold under Regulation D don’t come with the same disclosure requirements as a public stock offering. No prospectus, no SEC review of the offering materials, no guarantee that a company’s financials have been independently audited. Congress and the SEC decided that investors putting money into these deals need a baseline level of financial sophistication, or enough net worth to absorb a loss, before they’re allowed to accept that reduced disclosure. That’s the entire logic behind the accredited investor test. It’s not a measure of how smart you are. It’s a measure of whether regulators believe you can evaluate the risk yourself, or afford to be wrong.

The SEC’s Current Definition of an Accredited Investor

The rules have expanded since most people last looked at them. As of today, an individual can qualify as an accredited investor through any of the following paths.

The SEC added the professional license and knowledgeable employee paths in 2020, which means someone can qualify as accredited today without meeting either dollar threshold at all, as long as they hold the right securities license. Most Self-Directed IRA owners still qualify through the net worth or income test, but it’s worth knowing the license path exists if you or a family member holds one of those credentials.

Can a Self-Directed IRA Be an Accredited Investor?

An IRA isn’t a natural person, so the SEC doesn’t ask whether the account itself earns $200,000 a year or has a seven-figure net worth. Instead, the SEC looks through the account to the person who owns it. Under IRC 408, an IRA is legally structured as a trust, and the accredited investor rules for trusts generally look to whoever directs the trust’s investments, which in a Self-Directed IRA is the account owner.

In practice, this means the IRA owner’s personal net worth or income determines whether the IRA can make the investment. If you personally have a net worth over $1 million outside your primary residence, or you’ve earned more than $200,000 (or $300,000 jointly) for the past two years, your Self-Directed IRA can be treated as an accredited investor for purposes of making the investment, even though the money sitting inside the account is technically the IRA’s, not yours directly. I’ve had clients assume this disqualifies them because “the IRA doesn’t have income,” and that’s simply not how the rule works.

This is also where working with a custodian who understands alternative assets matters. At IRA Financial, our in-house tax and compliance team has walked thousands of clients through exactly this kind of documentation when a sponsor asks for proof of accredited status on a Self-Directed IRA investment, and getting the paperwork wrong at the subscription stage is a common, avoidable delay.

What Investments Actually Require This Status

Not every alternative asset needs accredited investor status. You can still buy rental real estate directly, fund a private loan, or invest in a small business with a Self-Directed IRA without qualifying as accredited. The requirement shows up specifically when the investment is structured as a securities offering under Regulation D or Regulation A+, which covers most of the following:

• Real estate syndications and private real estate funds
• Private equity and venture capital funds
• Hedge funds
• Certain crowdfunding offerings above Regulation CF limits
• Private business or startup financing structured as securities
• Debt funds and certain hard money lending funds

If a sponsor asks you to sign an accredited investor certification before you can invest, that’s your signal you’re looking at a Reg D or Reg A+ offering rather than a direct asset purchase.

Startup Investing With a Roth IRA

This is the specific question I get asked most, so it deserves its own answer. Startup equity, whether it’s a priced round or a SAFE, is almost always sold as a private securities offering, which means the same accredited investor rules above apply. The IRA owner still needs to clear the net worth test, the income test, or hold a qualifying license, and it doesn’t matter whether the account is Traditional or Roth. What changes with a Roth IRA is what happens on the other end.

Startups are one of the few asset classes where a Self-Directed IRA can turn a few thousand dollars into a genuinely life-changing sum, and in a Roth account, every dollar of that growth comes out tax-free in retirement. The best-known example of this is Peter Thiel’s Roth IRA, which reportedly bought founder shares of PayPal for a fraction of a cent each in the late 1990s and grew, entirely tax-free, into a position worth billions of dollars by the time it was reported on years later. Most startup investments obviously won’t play out that way, but it illustrates why a Roth Self-Directed IRA, rather than a Traditional one, is usually the account clients want funding a startup deal.

One structural detail worth knowing before you invest: most startups raise money as C corporations, and that matters for tax purposes inside an IRA. A C corporation pays its own corporate tax before anything flows to shareholders, so the IRA generally owes no Unrelated Business Taxable Income (UBTI) on its investment. If a startup is instead structured as an LLC or partnership running an active trade or business, that income can pass through to the IRA and get taxed at trust rates as UBTI, which may require filing Form 990-T. IRAs also cannot hold S corporation stock at all, so that structure is off the table entirely. Beyond the tax structure, the usual Self-Directed IRA compliance rules apply: you pay fair market value, you and your IRA together stay under 50% ownership of the company, and you don’t personally benefit from the investment outside the account.

Accredited Investor vs. Qualified Purchaser

Accredited investor status isn’t the top tier. Some funds, particularly larger private funds registered under different exemptions, require qualified purchaser status instead, which generally means $5 million or more in investable assets, again measured against the IRA owner personally rather than the account. Every qualified purchaser meets the accredited investor bar, but not every accredited investor clears the higher qualified purchaser threshold. I’ve written more on how that distinction plays out for Self-Directed IRA owners specifically, since it changes which funds are actually reachable.

The INVEST Act: How This Could Change

Congress has been looking at this definition for a while, and there’s real movement behind one bill worth watching. The INVEST Act (H.R. 3383) passed the House in December 2025 by a wide bipartisan margin and is now sitting with the Senate. As written, it would do three things to the accredited investor definition: require the SEC to adjust the $1 million net worth threshold for inflation on a regular schedule instead of leaving it static, add a pathway to accredited status based on professional licensure, education, or work experience beyond the existing Series 7, 65, and 82 licenses, and direct the SEC to create a standardized exam that would let someone qualify as accredited by demonstrating competency, regardless of income or net worth.

None of that is law yet. The Senate hasn’t assigned the bill to committee action as of this writing, and it could stall, get folded into a larger capital markets package, or pass largely as is. I’ll update this post if that changes, but for now, plan around the rules as they exist today, not the ones that might exist next year.

Final Thoughts

The accredited investor rules exist to draw a line around investments that carry more risk and less disclosure than a typical mutual fund or public stock, and that line runs through you as the IRA owner, not through the account itself. If you meet the net worth or income test, or you hold one of the qualifying licenses, your Self-Directed IRA can access the same private placements you could access personally. If you don’t meet it yet, that’s not necessarily permanent, and it’s worth revisiting each year as your financial picture changes. Either way, know which test you’re relying on before a sponsor asks you to certify it in writing.

This content is for educational purposes only and does not constitute legal, tax, or investment advice. Consult a qualified professional before making any investment decisions.