SDIRA + Non Recourse Loans

[Eden Meng]

Hi BP Community,

I am currently having 80K sitting in my  SDIRA. I am hoping to get the small multi families out of states ( Indianapolis/dalas Texas). I am reaching out if any one has an experience in pairing their SDIRA and non recourse loan ? If so, what is the impact on tax and the management company ?

Any inputs appreciated.

Thank you,Eden

[Patrick Prunty]

@Eden Meng

Hi Eden

In my checkbook IRA I have owned many rentals using leverage...UBIT and form 990-T is a drag...the tax liability isn't major during the hold but if you end up moving forward, I would make sure to payoff the loan prior to selling the asset to avoid tax liability on gain. Ultimately, after years of navigating this space and learning through my own personal experiences, I have moved my IRA funds into more passive investments, i.e. I lend money secured against real estate and collect interest. Although I can't use leverage in this case, things are much cleaner and easier.