What's allowed
The range is broad. Common asset classes held in self-directed plans include real estate (residential, commercial, raw land, rentals, flips), private loans and trust deeds, private company stock, cryptocurrency, tax liens and deeds, private equity and investment funds, and mineral rights. Conventional assets (stocks, bonds, and mutual funds) are permitted as well.
What's prohibited
Two asset categories are specifically off-limits for IRAs under the tax code.
Life insurance contracts of any kind are prohibited under IRC Section 408(a)(3). This applies to all IRA types. A Solo 401(k) may hold life insurance in limited circumstances, but the rules are complex and the practical benefit is rarely clear.
Collectibles are prohibited under IRC Section 408(m)(2) for both IRAs and Solo 401(k)s. The list includes artwork, rugs, antiques, stamps, alcoholic beverages, gems, and most coins. There is a narrow exception for certain precious metals - specifically US Eagle coins and bullion meeting a 99.9% purity standard - but these must be held in the physical possession of the IRA custodian and cannot be titled to an IRA LLC or IRA Trust.
The S corporation restriction
An IRA cannot hold shares of a subchapter S corporation. This is not an IRA rule. Rather this restriction stems from S corporation shareholder eligibility rules under IRC Section 1361, which limit ownership to individuals and certain trusts. A Solo 401(k), as a qualified retirement plan, is permitted to be an S corporation shareholder under IRC Section 1361(c)(6).