SDIRA loan to single member LLC?

3 Replies

What are the restrictions around loaning money from a SDIRA to an LLC that I am the only member of? Does it change if the LLC has multiple members? I understand that interest paid on the loan will need to go back into the SDIRA.

@Scott Horman

The IRA may not loan to an LLC you own 100% of, this is prohibited as you are a disqualified person to your IRA.

It does change if their are multiple members. Any disqualified person may not own 50% or more of the LLC. The structure of the LLC is very key. I would recommend you consult with an attorney who is well versed on self-directed IRA's to assist you with the set up and management of an LLC to ensure you avoid prohibited transactions

You would also need to be mindful of avoiding prohibited transactions within the dealings of the LLC.

Scott, 

Your IRA can not lend money to an LLC where you are a member. Regardless if you are the sole owner or it or just a part owner. Lending money to the LLC where you are part owner will provide you with personal benefit and the IRS rules are very clear: you can not personally benefit from your retirement account. Don't do it!

You did not provide any background as to what your situation is and what it is that you are trying to accomplish. There still might be a way to accomplish your goals, just not by lending your IRA funds to the LLC that you won. You are welcome to contact my office and schedule a call with me, would be happy to help you brainstorm your situation.