Joint Ownership of IRA and LLC – Does it Work?

[Linda Lai]

There is a lot of discussion about prohibited transactions using an IRA to fund a purchase of properties, and non-recourse loans to finance an IRA purchase. I'm considering using the fund in my IRA account for down payment; financing the balance of the purchase price by a LLC (I'm the only member of the LLC). The property will be owned jointly by IRA custodian FBO me and the LLC. I will borrow with my personal guarantee. This structure of joint ownership of IRA and LLC may solve the issues of UBIT and non-recourse loans. I'm not sure if this structure will constitute "prohibited transactions" under IRS rules. Any thoughts or suggestions will be greatly appreciated.