Suppose a self-directed IRA owns a checkbook control LLC. Can the IRA master lease a property (e.g. single-family house)? If so, can the IRA then sub-lease that property to a tenant that intends to occupy the house? The IRA may simultaneously receive a long-term option on the property.
The IRA enjoys ongoing inflows from the rental income spread and potential growth from appreciation when the option is exercised or bought out.
The IRA owner would do the same amount of property management as they would if they owned the property.
What I’m unsure about is whether the IRA can initially lease the property. Everything beyond that initial lease seems allowable based upon the example of an IRA outright owning a property.
I think you would not be able to option a lease controlled by a company you have a significant interest in. Totally get what you are saying with respect to the liability issue. Am ever exploring tax-free commerce and wanted to get some thoughts on this idea.