Invest in Private Companies/Funds/REITs/Equity

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4 Key Points To Consider When Investing in Private Companies & Funds

1: Private Company & Funds

An IRA can own private company stock or private funds. This can be LLC interests, LP interests, and C-Corp Stock. IRAs do not qualify as s-corp shareholders and therefore they cannot own s-corporation stock.

2: Gain Control

All subscription documents, stock certificates, and company records must vest the ownership of the IRA as Directed Trust Company FBO Customer Name IRA. Shares paid by IRA cannot be held in the IRA owner’s personal name.

3: UBIT

If the company is a pass-through (e.g. LLC) and receives ordinary income (for goods and services) then the IAR may be subject to UBTI tax. If the income is investment income then UBIT generally doesn’t apply.

4: 50% Rule

If disqualified persons (e.g. IRA owner, certain family) own 50% of more of an existing company, than the IRA cannot purchase shares or units from the Company.

Articles On How To Invest
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