SDIRA and S corp

[Marian Smith]

I am about to go to Barnes & Noble to get a book on SDIRA's but I thought I'd see if anyone has any advice.

A friend with an S corp needs to borrow money. He is willing to sell us a 5% position in the company instead of a loan but buying shares in an S corp in prohibited. The only "hybrid" solution I could come up with was to give him a very low interest loan and in return get the shares cheaply outside the SDIRA.

I called the SDIRA office and the person I talked to said they wouldn't hold a note for below market rate but couldn't tell me why not or where to find out why not and said the compliance office didn't take phone calls.

If the reason for the prohibition os S corps is for IRS tracking, then it should be okay because I would pay tax on the disbursements every year so it isn't as if I am "contributing" to my IRA. I understand that I "benefit" from the low rate loan by getting cheap stock, but I also do not benefit from the low rate loan