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Prohibited transaction question


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I am doing some research and would greatly appreciate some guidance…

Summary

Two IRA owners want their management company to be owned by their IRAs.

This is a construction management company, and the construction loan requires a personal guarantee.

Generally, an IRA owner cannot guarantee his IRA’s debt. Since

This loan will eventually rollover into a nonrecourse loan.

Question: Is there any exception or provision that would allow the investment, without resulting in a prohibited transaction.

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Guest Rajeev

CassandraS... cannot be done as you described it... but can be done using ROBS transaction... do a google search on ROBS transaction for material and also see information on the IRS site for the same.

Doing a ROBS transaction initially could be easy (due to many providers), but the ongoing costs, especially valuations can be a good deterrent for not doing it.

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