What are the procedures for investing IRA funds in closely-held enterprises?
IRA owners are often presented with opportunities to invest IRA funds in an existing or new closely-held enterprise, such as an operating business, a real estate venture or an investment partnership. Significant tax consequences can occur if such an investment is a “prohibited transaction” or generates “unrelated business taxable income.” However, in appropriate circumstances, an IRA’s investment in a closely-held enterprise can be structured to eliminate or reduce the risk of adverse tax consequences.
