All Forum Posts by: Ron Nawrocki

We recently developed some proprietary investment structures that do not incur UBIT for investors using leverage in their self-directed IRA.

I'm not clear why a 401k would bypass UBIT? ... since just like an IRA it is a non-taxable entity and the use of leverage will trigger UBIT.

I know our structures can still be used and then I'm confident UBIT won't be incurred ... until the IRS modifies the UBIT rules.

The new SAFE Act made all these answers obsolete. You can do up to 5 loans per year without a license ... after that you need to place it through a licensed lender or become one.

To me the entity is a non-issue. You can do it in your name, LLC, or Corporation ... I do some of each. It's only if I foreclose on it do I move the actual property to an LLC.
Private lending is fully taxable - if you can do some of it within a self-directed IRA do it !
If your personal tax rate is below corporate tax rates than keep it in your name or a single member LLC.
There may be some other useful tips in one of my presentations on the topic:[LINK REMOVED]

I will send you an e-mail this weekend.
I want to make these solutions available to as many real estate investors as possible .. I need to keep it under the radar screen to avoid UBIT tax laws being re-written.
Additionally it is proprietary so I need to avoid advertising the details publicly.
- Ron

IRA's & Trusts are subject to UBIT if you use a loan or financing to leverage a transaction. I work with many investors using IRA funds, some with checkbook control.
We have 3 proprietary solutions to leverage your IRA investment, use normal recourse lenders, and NOT incur UBIT. :D
We are now doing our 2nd transaction since developing the 1st solutions and will now broaden the availability.
We can't advertise or patent the process, since the IRS will work very fast to stop us from using what works under current tax rules. :cry: