UBIT Self Directed IRA (wholesaling)

[David Goings]

greetings. Got a first world problem on my hands here that hopefully others can learn from as well... I have a SDIRA with equity trust and was told I could cherry pick wholesale deals that I wanted to involve with my LLC to fund some of the profit to my SDIRA tax free. Here I am years end and my cpa is telling me it’s subject to unrelated business expense tax. Basically the SDIRA and my llc went 50/50 on a few deals taking on no debt and I never touched the money that went to my SDIRA. Equity trust is saying one thing and my cpa another. What do you think? I thank you in advance. -Dave Goings

[Steven Hamilton II]

Yes, it IS SUBJECT to UBIT. 
The other issue I would be careful about is you cannot earn on the same transaction your IRA does. It could be argued you are doing an activity to personally benefit your IRA if your IRA does not take title to the property at any time.

You may want to reach out to me to discuss how your IRA and LLC Partnered because you may have engaged in a prohibited transaction already.