Self directed IRA and unqualified persons

[James Talbert]

Does anyone know a way that it is possible to use a self directed IRA to invest in an LLC that I own as well? According to the IRS rules, i would be considered an unqualified person since I own both.

[Doreen Chaisson]

If you already own 50% or more of the LLC, then further investment by your IRA is prohibited. If you were starting a new LLC from scratch, both your IRA and your personal funds could be involved, but there are limitations on your role. For example, you can be the decision maker and handle the checkbook, but you would not be able to draw a salary or be involved with any of that LLC's assets. For example, if that LLC purchased rental properties, you could not do any work on those properties.

Also, because this would still be considered a single member LLC, most IRA custodians will require that you appoint a special advisor (attorney or CPA) to review every transaction of the LLC to ensure no prohibited transactions are taking place.