SDIRA - investing in my LLC

[Vanessa Peters]

Hello Everyone.  I know this question has been asked and answered but I have been reading many different answers.  Please forgive me for asking these questions as I try to figure out how to use my SDIRA.

I have an LLC that I own with my sisters. Obviously the LLC flips houses and we have been in business for just under a year. We have no official employees. We have done only one house so far that we self financed by hook and by crook. We paid ourselves back what the business borrowed from us personally (with reasonable but small interest). The profit we made from the house we put right back into our next project.

I have a self directed IRA. I think I am understanding correctly that I CANNOT loan our LLC any money from my personal SDIRA even if we are in the building phase of our business and not really paying ourselves yet.

Is there anything I can use that IRA for as it pertains to our LLC? We may not be able to self fund this next flip as the same opportunities may not be available - namely getting 0% balance transfer offers from our credit cards. It's kind of a catch 22 in that we self financed, but we run up our credit cards up do it (impacting credit) and we haven't been in business for two years for my traditional banks to help.

Any other creative ways I can fund my business?  We have a pre-approval from Lending One but they don't do new construction which is what we decided to do this time around. Any ideas will be appreciated.

[Brian Eastman]

@Vanessa Peters

I'll make this simple.  

Keep your IRA as far away as possible from your personal LLC.

Anything you are reading to the contrary is not pointing you in the right direction.

IRS rules prohibit any direct or indirect benefit between an IRA and a disqualified party. IRA capital added to your LLC is clearly a benefit to you, even with your fractional ownership.

A self-directed IRA is not a means for you to get access to the tax-sheltered IRA money for your own purposes. Such plans are simply a means to be more diversified in putting that tax sheltered money to work. You can invest in what you know, but not into yourself.