Private placements such as LLCs, Partnerships & Joint Ventures, and Private Stock are just some of the many options available with a Mountain West IRA self-directed individual retirement account.

An LLC is a legal organization that provides the advantages of a partnership while limiting legal liability of the individual partners the same way a corporation does.  Mountain West IRA requires proof that the LLC is in good standing on an annual basis, as well as an annual fair market valuation of the LLC provided by a qualified third party.

A partnership is a type of unincorporated business organization or agreement in which multiple individuals, called general partners, manage the business and are equally liable for the debts of the business.

Other individuals or entities such as an IRA 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 its share of the business profits or losses on either individual tax return or in the case of an IRA, a 990T Exempt Organization Business Income Tax Return. Estimated tax payments may be necessary for each of the partners for the year in progress. It is always recommended that anyone investing their IRA in an LLC or LP consult a tax advisor prior to the investment.

Here are some general rules regarding partnership 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 Mountain West 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.

Private or closed corporation stock offerings are not available to the public on the open market.

Normally, they are made to pre-qualified individuals. These offerings must comply with the securities Blue Sky laws in the state in which the offering is made. The number of individuals included in the offering cannot exceed the maximum stipulated by state law.

These offerings, usually made by corporations seeking capitalization, can be in any class of stock described in their prospectus. Many corporations act as their own registrar as well as transfer agent.

They may or may not use market makers for their offerings. Purchases and sales are described in their offering materials, which you should study closely.

Partnerships and small businesses have been the backbone for our nation’s economic growth. Companies such as HP, Merck, IBM, Disney, and GE were once private entities that went on to become pillars of the American business landscape.

Joint ventures can be in many forms. Usually it is an agreement between two or more individuals or entities where the agreement outlines which partner in the joint venture is responsible for and how the project will be completed and profits or losses split.

Often you are invited to be an investor, work within the company or know someone who works at the company, or you find a private entity via research.

Mountain West IRA is a passing self-directed IRA administrator who does not do due diligence on private entities.