Hanky panky with your IRA will cost you the bankruptcy exemption.

Although creditors typically cannot grab IRA funds, that rule does not apply when the debtor engages in prohibited transactions with the account. In this case, the owner of a self-directed IRA borrowed money from it and used the account to pay off a mortgage on property he wanted to acquire. His self-dealing with the IRA allowed his creditors to tap it (Willis, D.C., Fla.). Oddly enough, although his IRA lost its tax exemption due to his shenanigans, making the entire account taxable to him, IRS never came after him for back taxes.

A New Tax Savings Begins January 1, 2010