SDIRA to fund commercial building

[David Bell]

I am thinking of using my IRA to create a SDIRA, then creating an LLC to own a commercial building using funds from my SDIRA to build the building. Does anyone have experience on this process? Can I commingle my sisters IRA with mine to create this entity?Who would administer the IRA?

[Brian Eastman]

@David Bell

As described, what you are aiming for should be possible. The key is that the project be entirely of and for the benefit of the IRA, with no benefit between you and the IRA in either direction. You can deploy the IRA capital into such a project, but could not be hand's on involved in the construction, for example. You also want to avoid comingling IRA and personal funds. Your IRA could joint-venture with your sister or your sister's IRA.

A project such as you are considering will involve a lot of transactions from the IRA. As such, you will likely find that a Checkbook IRA LLC or Solo 401(k) plan will be the best tool for the job.

Several providers of such plans are active here on BP and will be able to help you understand the potential of such a plan and whether your strategy could be executed in a fashion that is compatible with IRS rules.  Do some reading in the forums and then make some phone calls to learn more about this option.