Software engineer · Acton, CA · Member since 2015 · 11 posts · 2 votes
I understand my self-directed IRA LLC cannot accept a non-recourse loan from a parent, but it looks like it can accept one from a sibling. What if a sibling wants to donate a gift of cash to my LLC? Is that allowed?
Software engineer · Acton, CA · Member since 2015 · 11 posts · 2 votes
10y
ok, thanks. So if my sister loans money to my LLC, and we sign a non-recourse promissory note, does that note have to be for a specific rental property that the LLC owns or can it be a general loan, not specific to any house. I know that if I finance/re-finance one of the properties with a non-recourse loan, then the percentage of income is taxable based on the portion of the property that is financed. If my sister's loan is not for a specific property, then do I still have to pay income tax on a portion of the income from my properties? I will be using the money she lends me to fix up one of the properties.
Investor · Panama City, FL · Member since 2015 · 378 posts · 183 votes
10y
While a sibling can loan your IRA LLC money as they are not consider a related under the prohibits transactions, but it has to be an arms length transaction, basically rates and terms a completely un-related party. The loan might trigger UBIT tax which can be as high as a brutal 39.6%. Best to just steer clear of this transaction all together.