Can You Put Cash from ROTH into an LLC?

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Question. Can you put cash from Roth into own LLC that owns passive income? No, you cannot. That would be oddly what’s called a prohibited transaction. So when you own rental property in your IRA, or any of these self-directed IRA accounts, there’s a arms length transaction rule where you can’t be adding sweat equity.

For example, when you buy a property and yourself director, I R a, you can’t be doing the property management. You have to pay third parties to do that. So by putting cash into your Roth and investing in Roth into your LLC, you also are violating like you can’t self deal. And I believe you cannot even partner with relatives or something like that.

As far as there’s, I’m sure there’s a lot of people that do this thing where they have a good buddy. Who’s good. At real estate, they invest. Their Roth IRA or self directed Roth IRA with their buddy and vice versa the way I see it, I think that’s a good way to getting around that totally follows the rules.

And yet I don’t do that because I don’t do any debt, investing. Everything I do is equity. And I also do that because I get the appreciation alongside of it.

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