Self-directed IRA profit question...

[Scott Nipp]

We are going to be setting up a self-directed IRA sometime down the road. My understanding is that all of the profits from an investment you can contribute back into the IRA with no limit. My question is do you HAVE to deposit ALL of the profits back into the IRA or can you keep some of the profits as cash for other immediate uses like living expenses, etc.?

[Phil G.]

@Scott Nipp 

Another note on partnering between yourself and the IRA. You would need to be able to justify that you could have pulled off the deal on your own without the IRA, using another strategy, otherwise it can be deemed self-dealing.