Deanna Hracha asked 4 weeks ago

Love the podcasts!
I have a complicated question that many lawyers/tax accountants probably couldn’t answer correctly.
The company I work for is selling an LLC it owns 100%. The parent company is an S Corp and I’m the CFO and 4% owner through exercised stock options. I want to buy the LLC personally; it is a cash cow of a company. Essentially the owner, my boss, was afraid I will leave if I buy the LLC, so instead he will let me invest up to 30% ownership into the LLC for 3 years and then he will sell it to me 100% (golden handcuffs essentially). In the meantime we will continue to run it as we do now.
Originally I was going to use a ROBS 401k to buy 100% of the LLC because most my cash is in 401ks and IRA’s. So now I have to switch gears and was hoping to use a self-directed IRA to invest about 20% for now. I’ve read conflicting information about prohibited transactions and minority ownership in an LLC.
Questions:

    1. Can I use a self directed IRA to invest about 20% n the LLC without breaking the rules since I have 4% ownership in the parent company and work in an officer role. My compensation is not tied to the performance of the LLC.
    2. If so, can I also invest personally another small percentage into the LLC, like 5% or so?
    3. If yes to #1, when he’s ready to sell outright to me, what are my options if it’s owned partially by my self directed IRA? Can I sell the IRA ownership back, roll my IRA funds into a ROBS 401k and purchase the entity outright that way? Probably not, but are there any other avenues?
    4. If no to #1, do you have any other suggestions in this situation?

Thanks! Hope to hear back soon!