A partnership is a type of unincorporated business organization in which multiple individuals, called general partners, manage the business and are equally liable for the debts of the business.
Other individuals, called limited partners, may invest in the business but are not directly involved in management. Limited partners are only liable to the extent of their investments.
The partnership itself does not pay income taxes, but each partner has to report their share of the business profits or losses on their individual tax return. Estimated tax payments are also necessary for each of the partners for the year in progress.
Here are some general rules regarding self-directed investments in your self-directed IRA:
- The partnership agreement must permit an individual retirement account or a qualified plan to be a partner.
- The partnership must comply with the appropriate state law, have a determinate life, and be assignable.
- The partnership subscription agreement must be signed by you as having been read and approved, and will be executed by AMERICAN IRA for your benefit.
- Partnerships may be subject to unrelated business income (UBIT) and other taxes. It’s important to consult your tax advisor for proper direction.
American IRA, LLC does not offer investment, tax, financial or legal advice to clients. Individuals who believe they need advice should consult with the appropriate professional(s) licensed in that area.