Prohibited transaction question

[CassandraS]

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.

[Draper55]

none that i am aware of...

[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.

[QDROphile]

The whole idea sucks and any suggestion of a ROBS arrangement to facilitate a transaction (as opposed to pure ownership) also sucks. At best, ROBS transactions are sensitive and complicated, and when they are entered into the facilitate an abuse they are dangerous.