Property management co in self-directed IRA

[K. Mitchell]

Anyone know if it is possible to run a property management company from inside a self-directed IRA? For example, say I roll over $1K to a separate self-directed IRA. Then I have it start a C corp property management co. Then I have the management co., which is operated by me, execute an agreement with me to manage the properties I own in my own name, for, say, 8% management fees. This would be the market rate. Is this possible?

And if it is possible, what if I did or didn't take a salary from the C corp?

Thanks,

Keith

[Tom A.]

I wouldn't even bother to run this by an attorney. I just wouldn't do it. You're putting money from your pocket into your IRA, that sets off a red flag right there. The penalty for crossing the line is way too large to make it worth trying to be that aggressive.

Plus you'd probably have to pay Unrelated Business Income Tax (UBIT) on profits made in the IRA by the PM company.