Can I loan my LLC money from my IRA?

[Cory Land]

If I have a self-directed IRA, can I loan a LLC money to fund a fix and flip? I am a 30% shareholder and I was reading that because of my equity percentage, my LLC is a qualified person/entity for this transaction.

[David Krulac]

So much of the SDIRA situations have not been tested in court yet, so things could shake out better or worse.

But since a "prohibited transaction" blows up the IRA, why take that chance. It would be more prudent to error on the side of being conservative, rather than do one "little thing" that dissolves your total IRA. And when you IRS is blown up there will be real tax consequences.

If you have money in your IRA, that you want to lend out, lend it to somebody who is NOT a disqualified party. You'll probably even get a higher return on your money.