Self-Directoed IRA
I have two clients who own a condo in their self-directed IRAs. My clients have several separate IRA accounts. The condo is the subject of a note for which two of their IRA accounts are liable. Are my clients’ other IRA accounts, which are not named on the note, nevertheless liable to pay the note?
Permalink Submitted by Jose Morales on Thu, 2015-03-12 20:24
To clarify, did you really mean that the condo itself or the IRA assets outside of the condo are liable in the event there is a default on the note? You cannot pledge IRA assets as collateral for a loan/note, doing so would be a prohibited transaction.
Permalink Submitted by Alan - IRA critic on Thu, 2015-03-12 20:28
No. And the other IRA accounts are not subject to distribution due to a prohibited transaction related to the condos either if the note was done correctly.
Permalink Submitted by Ben Meyer on Fri, 2015-03-13 13:20
Alan, what would be the correct way for a note to avoid the prohibited transaction sanctions?