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Email Consulting Guidance – CRP Contract as an IRA Investment

Email Consulting Guidance – CRP Contract as an IRA Investment

Posted by James M. Carlson
December 2021

Q-1. Mike, age 55, has a $463,000 self-directed IRA to which FB is custodian.

Mike directed the purchase of 160 acres of farmland from his IRA to which we complied.

After the purchase and receiving the deed, Mike informed us that we need to bring the recorded deed to our local FSA office to change the CRP contract to the IRA name.

The person handling CRP contracts has never put a non-individual as owner of a contract and seems to think that it won’t be allowed but really has no basis for that opinion.

We understand this is a gray area and we’ve done our due diligence as far as making sure we are only custodian of his IRA and making sure he signs off on all investment directives.

Have you ever seen a governmental contract such as CRP payment being paid to an IRA? Do you have any knowledge if this would be prohibited?

A-2. There is no IRA law prohibiting this investment (a CRP contract) as an IRA investment.

Further research would be needed to see if there are any “farming” laws or regulations prohibiting an owner (which is an IRA) from participating in the CRP program. One would think the public policy does not change because the owner is an IRA. I would want to review a written explanation if the explanation came back that the IRA is ineligible to participate in the CRP program.