Avoiding taxes on a life settlement

[Mark Beekman]

A tad off-topic from real estate, but I'm sure it pertains in some ways.....

I'm purchasing a life settlement with a significant return and I'm wondering how I can avoid taxes on the death benefit as much as possible. I'm purchasing the life settlement through my LLC. I'm thinking of opening a self-directed Roth IRA, contributing the maximum, and investing that portion (about 1/8th the cost of the policy) in the LLC (for a 1/8th share of the death benefit). I'm now trying to figure out how to avoid taxes on the remainder of the proceeds.

Anyone have any ideas?