I'm hoping someone here might just know the answer to my question offhand. I've tried doing some research on Roth IRA contributions, but haven't been easily able to find the answer I need.
I started a tree farm this spring. Basically, it's a thousand trees on about six acres of land. I own, through a holding corporation, the land as part of a much larger parcel that is for both recreational and investment purposes. I was telling some friends about the tree farm over lunch when all of a sudden it hit me that -- if possible -- I should own the timber rights in a Roth IRA.
Let me give a brief summary of the economics involved. I already own the land, so there was no real cost there. The trees themselves cost about $3k. The related items (stakes, protectors, etc.) cost another $4k or so. If they do well there's a reasonable chance that they will be worth $1MM in 30-40 years (give or take some on both the value and time).
I don't think there could there be a more perfect investment for a Roth IRA, given the dollar figures involved.
I am married. If necessary, we could split the entire investment cost for the timber rights between us for two Roth IRAs (i.e. $8k instead of $4k).
My questions are: (1) does anyone know what the rules are for Roth IRA contributions and whether timber rights can be an asset for a Roth IRA, and (2) if so, how would I legally hold the timber rights? Also, does anyone have any good links to a Roth IRA website that would explain this?
Thanks for any input . . .