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Private Placement 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 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.

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 advisor 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.

To purchase a private placement in your IRA, the process is as follows:

  1. Complete and return a Private Placement Purchase Kit.
  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.
  1. 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: 13905 W. Wainwright Dr., Boise, ID  83713
  1. 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.
  2. MWIRA must receive all complete and correct documentation at least 3 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

  • 13905 W. Wainwright Dr. Boise, ID 83713
  • Fax: (208) 376-4567 – Attention Transactions Department
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 record keeping fees as they arise OR Pay your current transaction fees (if applicable) and one year of record keeping fees in advance – you may pay these fees by check or credit card (one-time authorization)

Private Placement Purchase Forms

Outgoing Wire Instructions | Transactions

Please submit the Outgoing Wire Instructions Form when sending outgoing funds via wire to purchase private placement assets.

Purchase Kit | Private Placement

Download the purchase kit for private placement.

Purchase Kit | Private Placement - Qualified Plan

Download Purchase Kit | Private Placement - Qualified Plan.

Purchase Kit | Private Stock

Download the Private Stock Purchase Kit.

Private Placement Maintenance Forms

Sell Direction Letter | General (Non Real Estate)

Download Sell Direction Letter | General (Non Real Estate).

Direction of Investment | Private Placement

Download the Direction of Investment | Private Placement.

Form 990-T

Download form 990-T.

IRA LLC Requirements

IRA LLC Requirements

Incoming Check and Wire Instructions - Private Placement

Download Incoming Check and Wire Instructions - Private Placement.

Private Placement Disclaimer and Indemnity Agreement

Private Placement Disclaimer and Indemnity Agreement

Private Placement Instruction Letter

Download the Private Placement Instruction Letter.

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.
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