Invest in Private Placements with Self-Directed IRA

A self-directed IRA can invest in private placements or private-held entities, possibly growing their account by being involved with such arrangements as Limited Partnerships, LLCs, C-Corporations and Land/Personal Property Trusts. The IRS does not allow investing in General Partnerships or subchapter S Corporations.

Important things to consider when investing in private placements with a self-directed IRA:

  • If it is an existing entity – total ownership of disqualified individuals (including the IRA owner) cannot be 50% or higher. If it is, the IRA cannot invest in it.
  • If the IRA is running a business in a flow through entity (i.e. Limited Partnership or LLC) it may be subject to UBIT (Unrelated Business Income Tax).
  • The IRA owner cannot work for a business owned by their IRA.