All Forum Posts by: Rajeev Kotyan

@Brian Eastman: Completely agree... and admit I misread your post... 

@Brian Eastman: Leverage is available to an IRA in the stock market, but just like the non-recourse lenders, there is only a handful of them that provide leverage, but only to their select clients.

@Chris Seveney: The way you have described it is not permitted... If on the other hand it is the financing aspect that you are concerned about, then there are solutions to that, such as working with financial institutions that provide non-recourse loans to IRA's as well as private lenders.

@Brian Eastman: Please update your knowledge of information, as Pensco, Equity, Sterling (now part of Equity) and IRA Services also do permit IRA LLC, exactly in the manner that you have described in the two step process, just that they have additional documentation to be provided as compared to some of the others in the list.

Additionally, an IRA account can only be opened by a custodian (who is an approved bank, trust company or equivalent). They are the most important component. Custodians are generally passive, and should not be providing any form of advice.

With regards to the investments whether it is an IRA LLC or otherwise, the individuals should work with knowledgeable qualified professionals to provide them with what they require, whether they be advisors, legal counsel, facilitators, CPA's or others.

@Aaron Burwick: All the custodians, like any financial institutions have their good, bad and ugly. You have to learn what is clearly required by each of the financial institutions and work within the parameters that they have set. Asking the questions to each of the custodians can get you all the various answers. Chatting with their customer support gives you a better idea. After that seeing whether their parameters (which are generally over and above the IRS requirements) satisfy your needs, and you find the right custodians.

As usual building relationships with one or a few of them allows you to have transactions move smoothly through the system.

@Paul M.: Have done it, but due to the costs and what my intent was in the long term, I did that as a capital improvement and depreciated it over the lifetime of the equipment.

@Mark C.: From what you appear to be stating is that the IRA will buy the property (20% monies down) and you would be providing a mortgage (75% monies) and the balance is from a third party. If that is correct in my understanding then you are effectively lending monies to your IRA, which is prohibited.

If on the other hand you are stating that you are creating a JV (20% IRA, 75% personal and 5% third-party), and your portion is a personal guarantee pledge of ownership to borrow the monies to pay for your share, then you are extremely close to stating that you are using your IRA based partnership to enable you to get a loan which is a prohibited transaction.

While these appear to be good food for thought, as professionals we would be happy have you test the case with the IRS so that we can all learn from your experiences (I am sure Brian would concur too) :-). This is a not a recommendation that we would provide.

@Shaun Allison: In your statements you have made, you are stating that "you want to have someone invest in your company", and you do not appear to state you want to "borrow" money to complete your project. Typically when one states "you want to have someone invest in your company", you generally come under securities laws and any good self directed IRA custodian who are worth their salt, would ask for information that complies with securities regulations for raising of capital, whether is exempt securities or otherwise.

If your intention is to borrow monies, and provide a mortgage (and most specifically provide a mortgage), there is a huge exemption for that.

This does not matter whether is comes from a self directed IRA or 401K or otherwise. Just simply creating a by-pass through checkbook control is not a solution from your perspective (as it pertains to securities laws violation).

Please work with a qualified and knowledgeable professional to assist you in how you work with your prospective investors (or lenders).

@Michael Medeiros: In RI: McLaughlin & Quinn, LLC (attorney and CPA firm) www.mclaughlinquinn.com... ask for either Atty. Kathryn Fyans, Atty. Kathryn S. Windsor or Atty. Cory Bilodeau. They are all knowledgeable about this space, and also train CPA's about this space.

Disclosure: I DO NOT work for them, but have used them in the past.

@Kenneth Shultz: The short answer is no... your employer based income is separate from your side business. Only income from your side businesses can be used to fund for your own solo(k) [assuming you have no employees].

Additionally, if you have a 401k from your employer, in the employee bucket you are limited to $18K for 2016 across all your 401k's and the employer bucket for your side business is approx 20% of gross income.