All Forum Posts by: Shango Collier

When filling out a W-9 for a Self-Directed IRA (SDIRA), you should not use your personal name or Social Security Number. Instead, the W-9 must be completed using the custodian’s name (e.g., “ABC Trust Company”) and the custodian’s EIN—not the IRA account holder’s info or the name of the IRA (like “XYZ Trust Company FBO John Doe IRA”). That’s because the SDIRA is a tax-exempt entity, and the custodian is the legal owner of the assets for tax purposes. Using the wrong name or TIN could cause compliance issues or misreporting. So if you’re registering to bid and need to submit a W-9, make sure the custodian’s information is what goes on the form. If you’re still unsure, the article recommends checking directly with your custodian or getting written confirmation from a tax professional. 

 We have invested with a SDIRA and have had to complete W9 as well as we run a fund and have to get them from investors. Here is the example we followed which is we used the custodian name and ein:

Completing IRS Form W-9 for a Self-Directed IRA or Solo 401(k) - IRA Financial

Sorry for the slow response. Work has been busy. Most lenders will not lend to an IRA due to the lack of a personal guaranty. We do it, but it's a much more restrictive loan. Some banks will do it as well, but they usually will only do it for a customer that's got a significant relationship outside of the IRA with the bank. You'll usually have to put more down. Private lenders will be more apt to do those deals than more conventional sources. Usually, we're lending to an entity, usually an LLC, that is owned by the IRA, so the IRA is in the position of guarantor, but you're right, you personally can't guaranty the deal. Does that help?

@Ryan Sing

I agree with @Brian Eastman, usually many people that are starting out hear about SDIRA's & are extremely excited to turn around invest in their own business, whether buying property, doing fix & flips, etc. This all can be done usually with a ton of extra steps & more oversight by the custodian of the IRA. With that said, it is often a little harder to maintain in good standing, as you have to be very mindful how it is all done, ensure that you don't overstep any of the rules & regulations that may trigger penalty's and more.

Most investors including myself, normally stay away from buying property within the SDIRA's. We also cannot lend to ourselves, businesses, or direct family + their businesses. You need to ensure you avoid prohibited transactions & self dealings because it can come with its consequences like: disqualification of the IRA, triggering early withdrawal penalties, tax penalties, loss of tax-advantaged account status, and more...

Self-dealing typically involves transactions where you or a disqualified person (such as family members or entities you control) personally benefit from your IRA's assets. Examples include:

1. Buying real estate with your IRA and living in it or letting a family member live in it.
2. Selling personal assets to your IRA at any price.
3. Using IRA funds for a business you own or operate, even indirectly.
4. Loaning money from your IRA to yourself, a family member, or a business you control.
5. Receiving personal compensation for managing IRA assets.
6. More

To avoid this, myself & most others utilize their SDIRA's for lending to other investors like private money/debt. This is usually still very lucrative & usually the easiest. Then there are still a ton of other things can invest in as well, which all come with their individual learning curves.

 Additionally a seller carry would work as long as it’s non-recourse. Also a sub 2 would work even though technically the loan isn’t non-recourse since the ira owner didn’t guarantee the loan.