Partnering with your own SDIRA

[Eric Jan]

Just listened to Gabe DaSilva's interview on the podcast and he mentioned that he partnered with his SDIRA on his first flip. Could someone clarify how that works and the nuances that need to be worked out so that it would not be considered a disqualified transaction? In my scenario, I would be bringing in my own money and partnering with monies from my SDIRA at a certain % split. Afterwards I'd split the profits equally. That is how it would play out in my head. 

[Dmitriy Fomichenko]

@Daria B.

While it is possible to structure a partnership between an IRA and disqualified person, the majority of cases I had the opportunity to review such proposed partnership would result in a prohibited transaction. As Eric explained earlier he personally does not have enough cash to do the deal on his own and have to partner with his IRA to make it possible. The result - he is getting personal benefit from his IRA which is disallowed.

Whenever there is a disqualified person involved in a transaction with qualified plan - there is always risk of a prohibited transaction. There are so many safer ways to make money, why risk it???