Private Placements

Mountain West IRA – Private Placements

Private Entities

What are private placement investments?

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.

What are Limited Liability Companies (LLCs)?

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 also requires proof that the LLC in good standing on an annual basis, as well as an annual fair market valuation of the LLC provided by a qualified third party. 

What is a Partnership (LP)?

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 adviser for proper direction.

What is private stock?

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.

What are joint ventures?

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.

How do I find a private entity to invest in?

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.

Buying Private Placements in Your Self-Directed IRA

To purchase a private placement, the process is as follows:
  1. Complete and return a Private Placement Purchase Kit – Watch Instructional Video HERE.
  2. Provide MWIRA with a copy of the entity’s Operating Agreement documents.
  3. Provide MWIRA with a Certificate of Good Standing from the state(s) in which the entity resides.
    • Provide MWIRA with proof of good standing and a list of the entity’s officers or managers, annually, as provided by the state in which the entity is registered.
  4. Provide MWIRA with a copy of the entity’s Subscription Agreement that clearly specifies your IRA as the “Investor”.
    • This verbiage must read: Mountain West IRA, Inc. FBO (Your Name) IRA.
    • Any investor address information must be our office address: 10096 W. Fairview Ave., Ste. 160 Boise, ID 83704
  5. You will NOT sign as the “Investor”. You will sign underneath, or to the side, as “Read and Approved by: (Your Name)” and MWIRA will sign as the “Investor” on behalf of your IRA.
  6. MWIRA must receive all complete and correct documentation at least 2 business days prior to the day you wish funds to be sent.

Required forms and documents can be mailed, faxed or sent as an email attachment to:

Mountain West IRA
10096 W. Fairview Ave., Ste. 160
Boise, ID  83704
Fax: (208) 376-4567 – Attention Transactions Department
Email: Transactions@MWIRA.com

IMPORTANT:  If you are using 100% of the cash in your IRA for this purchase, and you pay your fees by check or from your IRA account, you will need to complete at least one of the following items before your transaction will be processed:

  • Place a credit card on file with MWIRA to pay your current transaction fees (if applicable) and to pay for future quarterly or annual recordkeeping fees as they arise.

OR

  • Pay your current transaction fees (if applicable) and one year of recordkeeping fees in advance – you may pay these fees by check or credit card (one-time authorization).

Private Placement Forms

Outgoing Wire Instructions – Transactions

Review step-by-step directions to complete a Outgoing Wire Instructions – Transactions

Electronic Signature: Outgoing Wire Instructions – Transactions

PDF: Outgoing Wire Instructions – Transactions

*Please complete for the purchase or sale for Real Estate, Promissory Note, Private Placement, or another type of transaction funding.

Private Placement Purchase Kit

Review step-by-step directions to complete an Private Placement here

Electronic Signature: Private Placement Purchase Kit

PDF: Private Placement Purchase Kit

Private Stock Purchase Kit

Review step-by-step directions to complete a Private Stock Purchase Kit

Electronic Signature: Private Stock Purchase Kit

PDF: Private Stock Purchase Kit

Private Placement Maintenance

Outgoing Wire Instructions – Maintenance

Review step-by-step directions to complete a Outgoing Wire Instructions – Maintenance

Electronic Signature: Outgoing Wire Instructions – Maintenance

PDF: Outgoing Wire Instructions – Maintenance

*Please complete for income or expenses for an asset your IRA currently owns. 

Incoming Check & Wire Instructions
Private Placement Instruction Letter

Review step-by-step directions to complete a Private Placement Instruction Letter here

Electronic Signature: Private Placement Instruction Letter

PDF: Private Placement Instruction Letter

Private Placement Disclaimer & Indemnity Agreement

Review step-by-step directions to complete a Private Placement Disclaimer & Indemnity Agreement here

Electronic Signature: Private Placement Disclaimer & Indemnity Agreement

PDF: Private Placement Disclaimer & Indemnity Agreement

IRA LLC Requirements

Review step-by-step directions to complete a IRA LLC Requirements Form here

Electronic Signature: IRA LLC Requirements

PDF: IRA LLC Requirements

Form 990-T

Review step-by-step directions to complete a Form 990-T here

Electronic Signature: Form 990-T

PDF: Form 990-T

 

Mountain West IRA 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.