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Learn how to maximize returns w/real estate mortgage notes using your self-directed IRA.
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Promissory Notes and Loan Investments with a Self Directed IRA
- A self directed IRA may loan money to non-disqualified persons as an investment. An IRA cannot loan money to the IRA owner or family members of the IRA owner as they are disqualified persons.
- The loan from the IRA may be secured by real estate or other assets or may also be un-secured.
- Un-secured loans can be risky investments for an IRA, and the IRA owner must closely evaluate the borrower’s credit worthiness.
- Equity participation notes, where the IRA gets a share of profits from a loan, can result in UBIT tax to the IRA.
Source: “The Self Directed IRA Handbook” – Mat Sorensen, Attorney at Law