Self-Directed IRAs to partially fund a deal

searcher profile

January 03, 2019

by a searcher from Texas Tech University in Denver, CO, USA

Has anyone used a self-directed IRA to invest in an acquisition? Would love any links, thoughts, or lessons the group has on this topic! 

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Reply by a searcher
from Harvard University in 1970 Walton Dr, Burlington, WA 98233, USA
I had a solo 401k completely set up. I was going to roll a Keogh into a 401k and fund the max for the year into the new 401k. Last minute the lender got heartburn with the source of funds. If you have a deal and a lender, be sure that they are on board before executing the solo 401k.

It is patently ridiculous that I could have invested my solo 401k into a US-listed Chinese manufacturer without a hitch, but to buy a private US manufacturer employing US workers I had to take major tax penalties to access my retirement savings.
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Reply by an intermediary
from University of Illinois at Urbana in Chicago, IL, USA
We acquired a business in conjunction with an SBA loan and used a company called Guidant (www.guidantfinancial.com). They have been ethical and responsive to work with but it's very cumbersome to use them so I would suggest talking to a CPA or tax lawyer that is familiar with these types of transactions. I am considering another acquisition, again using IRA capital, and I hope to find a simpler way to do it.
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