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Updated almost 4 years ago on . Most recent reply

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Suzanne Player
  • Attorney
  • New York City / Long Island, NY
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597
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Self Directed IRA funds - use for upfront costs of syndication?

Suzanne Player
  • Attorney
  • New York City / Long Island, NY
Posted

I can't seem to find the answer to this question in my searches, perhaps someone has some experience or expertise with this question- 

Can I use funds from my self-directed IRA for the upfront costs of a syndication in which I'm a sponsor, provided:

the funds go directly from the SDIRA to the syndication LLC, and

my SDIRA gets reimbursed directly from the syndication LLC?

I understand that self-directed IRA money can't be used to invest a syndication if I'm the sponsor because I would be earning money from the syndication - making it an active investment (in violation of IRA rules). There is also the rule that I can't lend myself money from my own IRA. But this is lending money (short term) for a syndication - a separate entity.

I would imagine I might have to charge the syndication LLC interest for this to be permissible under IRS rules?


  • Suzanne Player
  • 516-503-7959
  • Most Popular Reply

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    Dmitriy Fomichenko
    #1 New Member Introductions Contributor
    • Solo 401k Expert
    • Anaheim Hills, CA
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    Dmitriy Fomichenko
    #1 New Member Introductions Contributor
    • Solo 401k Expert
    • Anaheim Hills, CA
    Replied

    No, since you are the sponsor - your IRA can't invest into this project, period!

    • Dmitriy Fomichenko
    • (949) 228-9393
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