Your club account as an IRA????
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Your club account as an IRA???? Recently several people have asked about IRA's
within an investment club. For example...
I would like to find out on how
to set up IRA/Roth IRA account and offer this benefit of tax deferrel/avoidence
to our club members. I understand each one of us can open an
IRA/Roth IRA account with any brokerage firm. We would like to manage our
investment as a club just like regular account.
While the 1996 edition of NAIC's Starting
and Running a Profitable Investment Club indicates that it
is possible to allow club members to invest their IRA funds in the club, as a
practical matter, I know of very few clubs, if any, that do
so.
First, the club must find an IRA custodian, usually
a bank or a broker, willing to administer the account as a limited partner of
the club. This is a difficult task.
If you do find a custodian willing to do so, then
the club must adopt a partnership agreement whereby the club is established as a
limited partnership. The IRA custodian would be a limited partner without
any rights to participate in the management of the club, while all other
partners would be general partners in the club.
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