Self Directed IRA - Accessing for funding deals

[Richard Lindman]

Hello BP,

Because of the rules, it is not possible for the owner of a Self Directed IRA to loan money to their LLC's. It would be considered a prohibited transaction.

My solution is to find other investors with a Self Directed IRA who are in the same position. At a high level, the transaction would look like this:

Investor A loans money to Investor B from their SDIRA.

Investor B loans money to Investor A from their SDIRA.

Both loans have the same terms, backed by the real estate of each borrower.

I have confirmed that this is type of arrangement does not violate the rules governing SDIRAs.

Is anyone else in BP using this strategy?  If so, I would appreciate your hearing your experiences.  

Thanks,

Richard

[Steve K.]

aloha all, first post for me here on BP

i have a friend who graduated with a masters in taxation

whenever i came up with one of these "what if" situations, he would always patiently tell me, "steve, there are people smarter than us at the IRS that make the rules. and there are people smarter than them working at the IRS that try and catch people who come up with ways to break those rules. so there's no way that you are going to come up with an idea that you will get away with"

he also told me "the first thing we learned in the master's program was 'cash does not equal income'"

another gem was "everything's a deduction- until you get caught"

have a great day, everyone

aloha

steve