Posted by Nate on March 19, 2001 at 23:00:48:
I am not a tax attorney, nor an accountant, so my guesses are as informed as yours. What you’ve said sounds right.
I guess by “partner” with your IRA, you mean that your IRA can invest in something, and you can also invest in the same thing (say, an LLC, or a limited partnership…as long as it is not controlled by you or an entity you control).
I personally think the more powerful use of the IRA is that just because you can’t engage in self-dealing with “prohibited persons”, that is not really much of a limitation. Prohibited persons is a fairly narrow definition – you, your spouse, direct ancestors (i.e. parents, grandparents), descendents, and spouses of same.
It does NOT include siblings, aunts, uncles, business partners, best friends, etc. etc. etc. It would be pretty simple to set up an arrangement whereby your IRA invests in their deals and their IRA invests in your deals. Clean, easy, and perfectly legal. Best part is, you both win.