https://directedira.com/ IRA LLCs for Real Estate: Privacy, Prohibited Transactions, Depreciation, and UBTI/UDFI Explained

Dennis interviews Lindsay Mersino on using IRA LLCs for real estate investing, clarifying that an LLC—especially a single-member LLC—doesn’t automatically create tax benefits. They cover why investors use IRA LLCs for privacy (investing under the LLC name), speed (checkbook control vs. custodian processing), and saving transaction fees for active investors. Lindsay explains fix-and-flip activity limits as a passive-versus-active issue, with a conservative safe zone of two to three flips per year. She outlines depreciation rules (generally irrelevant unless UBIT/UDFI applies), defines prohibited transactions (credit extension, certain asset classes, and disqualified parties), and describes structuring personal funds alongside IRA funds via an ab initio multi-member IRA LLC with fixed ownership percentages. Finally, she explains UBTI for operating businesses and UDFI for debt-financed deals, noting trust tax brackets and that UDFI often compares favorably to investing outside an IRA.

00:00 How to use IRA LLC with Directed IRA

01:27 Tax Benefits & IRA LLC Basics

10:14 Prohibited Transactions

12:49 Partnering Personal Funds with IRA

17:59 UBTI & UDFI Explained

Directed IRA website

https://directedira.com/

Odin Capital Group Website

https://odincapgroup.com/odin-capital-group-home