Depreciation Recapture via Syndication in SDIRA?

[William Edwards]

Would there be any considerations regarding depreciation recapture when a syndicated investment is disposed (ex: at 10 years) when purchased via an SDIRA (Self Directed IRA)?

Will those investment funds need to be 1031'd at disposal?

My thought process is that since the investment is held in an IRA, they haven't had a tax benefit from depreciation during the hold period (with the possible exception of reducing UDFI/UBIT liability on the leveraged portion) - so, it would possibly be a mute point.

I'm considering using an SDIRA to invest in a syndication as an LP and trying to think about all the angles.

Thanks in advance.

-William Edwards