Some investments work better than others.
CPAs will find little formal guidance on IRA investments from the IRS or the Department of Labor. Foreign investments should be limited to ADRs and domestically sponsored mutual funds. The CPA also should encourage the client to obtain a letter ruling from the IRS in advance. Transactions must be made at arm's length and not involve the IRA owner or a member of his or her family. To avoid such problems, the CPA should emphasize investments for which established markets already exist.