Can a Roth IRA invests in an LLC

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Topic Author
AndThen
Posts: 32
Joined: Sun Mar 01, 2015 4:32 pm

Can a Roth IRA invests in an LLC

Post by AndThen »

I am 100% owner of an LLC (LLC Holding), lets say that the LLC Holding has a 20% ownership in LLC Business.

We are doing a capital raise for LLC Business.

Can I have my roth invest $6000 in LLC holding to later invest in LLC Business?

So that a portion on the equity in the LLC Holding is held in a roth account?

https://www.propublica.org/article/lord ... piggy-bank
fabdog
Posts: 2082
Joined: Wed Jan 16, 2013 1:59 pm
Location: Williamsburg VA

Re: Can a Roth IRA invests in an LLC

Post by fabdog »

I do not believe that you can do that, it would be considered self dealing as you'd be holding an investment you own and moving it into the IRA.

The Fidelity/Schwab/Vanguards of the world don't allow those types of holding. There are specialized IRA custodians who agree to be custodians of things like real estate, gold, collectibles, etc. You could search the forum to finds names and consult with them, self directed IRA's

The strategy Pro publica highlights with Mr Thiel (and others) is buying startup stock very cheaply in a ROTH and then just let it grow. But it can't be your own house/company that you invest in.

Here's an article on the basics

https://www.nerdwallet.com/article/inve ... rected-ira

Edited to add that a possible way to do this is put the cash in your Roth, and then have the Roth invest in the other LLC (instead of routing thru your LLC)
You'll still need a self directed IRA (watch the fees) but this may open a path

Mike
Topic Author
AndThen
Posts: 32
Joined: Sun Mar 01, 2015 4:32 pm

Re: Can a Roth IRA invests in an LLC

Post by AndThen »

Thank you for providing that insight.

I appreciate it.
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retiredjg
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Joined: Thu Jan 10, 2008 12:56 pm

Re: Can a Roth IRA invests in an LLC

Post by retiredjg »

Even if this is possible, you should not want your current income and your retirement nest egg both invested in the same entity.

In my opinion.
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