<html><head><meta http-equiv="Content-Type" content="text/html; charset=us-ascii"><meta name="Generator" content="Microsoft Word 14 (filtered medium)"><style><!--
/* Font Definitions */
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
@font-face
{font-family:Tahoma;
panose-1:2 11 6 4 3 5 4 4 2 4;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
margin-bottom:.0001pt;
font-size:11.0pt;
font-family:"Calibri","sans-serif";}
a:link, span.MsoHyperlink
{mso-style-priority:99;
color:blue;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{mso-style-priority:99;
color:purple;
text-decoration:underline;}
p.MsoPlainText, li.MsoPlainText, div.MsoPlainText
{mso-style-priority:99;
mso-style-link:"Plain Text Char";
margin:0in;
margin-bottom:.0001pt;
font-size:12.0pt;
font-family:"Times New Roman","serif";}
p.MsoAcetate, li.MsoAcetate, div.MsoAcetate
{mso-style-priority:99;
mso-style-link:"Balloon Text Char";
margin:0in;
margin-bottom:.0001pt;
font-size:8.0pt;
font-family:"Tahoma","sans-serif";}
span.EmailStyle17
{mso-style-type:personal-compose;
font-family:"Times New Roman","serif";
color:windowtext;}
span.BalloonTextChar
{mso-style-name:"Balloon Text Char";
mso-style-priority:99;
mso-style-link:"Balloon Text";
font-family:"Tahoma","sans-serif";}
span.PlainTextChar
{mso-style-name:"Plain Text Char";
mso-style-priority:99;
mso-style-link:"Plain Text";
font-family:"Times New Roman","serif";}
.MsoChpDefault
{mso-style-type:export-only;
font-family:"Calibri","sans-serif";}
@page WordSection1
{size:8.5in 11.0in;
margin:1.0in 1.0in 1.0in 1.0in;}
div.WordSection1
{page:WordSection1;}
--></style></head><body lang="EN-US" link="blue" vlink="purple"><div class="WordSection1"><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">Would like to hear from counsel who has experience using a self-directed IRA for real estate investing. I am familiar with the great RPPT article from the summer and am using it. Do have some prior experience with the practice in the context of ‘hard money loans’ with no ‘disqualified’ individuals but have a more of a technical question.</span></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif""> </span></p><p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif"">Using an LLC where there are three members and one of the members has a 49% interest, the second member has a 49% interest and a third member has a 1% interest. All three members are unrelated. Having one of the 49% interest members borrowing money from a lineal ancestor using a self-directed IRA.. Normally would be problematic because the borrower would be a “disqualified individual". 26 USC 4975(e)(2). The 49% rule from </span>26 USC 4975(e)(2)(G),</p><p class="MsoNormal"> </p><p class="MsoNormal">Thanks.</p><p class="MsoNormal" style="line-height:12.0pt"><b><span style="font-size:10.0pt;font-family:"Times New Roman","serif""> </span></b></p><p class="MsoNormal" style="line-height:12.0pt"><b><span style="font-size:10.0pt;font-family:"Times New Roman","serif""> </span></b></p><p class="MsoNormal" style="line-height:12.0pt"><img width="86" height="130" src="cid:image002.jpg@01D004D4.DE17BD60" align="left" hspace="12"><b><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Robert R. Rowley</span></b><span style="font-size:10.0pt;font-family:"Times New Roman","serif""> | Attorney at Law</span></p><p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">505 W. Riverside Ave, Suite 500</span></p><p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Spokane, WA 99201</span></p><p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Telephone: (509) 252-5074</span></p><p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Mobile: (509) 994-1143</span></p><p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Facsimile: (509) 928-3084</span></p><p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Email: </span><a href="mailto:rob@rowleylegal.com"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:blue">rob@rowleylegal.com</span></a><span style="font-size:10.0pt;font-family:"Times New Roman","serif""></span></p><p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Web Site: </span><a href="http://www.rowleylegal.com/"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:blue">www.rowleylegal.com</span></a><span style="font-size:10.0pt;font-family:"Times New Roman","serif""></span></p><p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif""> </span></p><p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">Practice concentrated on business, real estate and general legal matters in Washington and Idaho.</span></p><p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif""> </span></p><p class="MsoNormal"><a href="https://www.facebook.com/rowleylegal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:windowtext;text-decoration:none"><img border="0" width="24" height="24" id="Picture_x0020_2" src="cid:image003.gif@01D004D4.AD92EED0"></span></a><a href="https://www.linkedin.com/pub/rob-rowley/11/172/b20"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:windowtext;text-decoration:none"><img border="0" width="24" height="24" id="Picture_x0020_3" src="cid:image004.gif@01D004D4.AD92EED0"></span></a><a href="https://twitter.com/ROBERTRROWLEY"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:windowtext;text-decoration:none"><img border="0" width="24" height="24" id="Picture_x0020_4" src="cid:image005.gif@01D004D4.AD92EED0"></span></a><a href="http://www.yelp.com/biz/robert-r-rowley-spokane"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:windowtext;text-decoration:none"><img border="0" width="43" height="21" id="Picture_x0020_5" src="cid:image007.jpg@01D004D4.DE17BD60"></span></a><span style="font-size:10.0pt;font-family:"Times New Roman","serif""></span></p><p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif""> </span></p><p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">NOTICE: The contents of this message and any attachments may be protected by the attorney-client privilege, work product doctrine or other applicable protections. If you are not the intended recipient or have received this message in error, please notify the sender and promptly delete the message. Thank you for your assistance.</span></p><p class="MsoNormal" style="background:white"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:#222222">DISCLAIMER: You should recognize that responses provided by e-mail means are akin to ordinary telephone or face-to-face conversations and do not reflect the level of factual or legal inquiry or analysis which would be applied in the case of a formal legal opinion. A formal opinion may very well reach a different conclusion.</span></p><p class="MsoNormal"> </p></div></body></html>