Top 10 Self Directed IRA/401k Mistakes – #5 IRA owner loans money to a third party with equity kicker in order to avoid UBTI
Loaning money to an independent, third party is acceptable and the receipt of interest income is generally considered to be passive and therefore not subject to UBTI. However, adding the equity kicker component to the loan is likely to be viewed as nothing more than a disguised equity interest in the business. This would most likely not avoid any UBTI on the IRA.
I enjoyed this interesting topic and look forward to seeing more!
we all know it is not easy as a paw print to get approved nowadays.
regards
Drew
As a Newbie, I’m at all times looking on-line for articles that may help me get additional ahead.
Can you provide more information on this? cheers