For your convenience, 5498 Tax Forms are available online on the Client Portal. Also, if you need to make a fee payment, please use e-bill express. Thank you for your business.

Forge Trust

For your convenience, 5498 Tax Forms are available online on the Client Portal. Also, if you need to make a fee payment, please use e-bill express. Thank you for your business.

For your convenience, 5498 Tax Forms are available online on the Client Portal. Also, if you need to make a fee payment, please use e-bill express. Thank you for your business.

Promissory Notes & Trust Deeds IRA

Did you ever think that your IRA could lend money?

Self-directed IRA owners are permitted to lend money from their IRA or use IRA funds to invest in promissory notes, trust deeds and mortgages notes. Loans may be made directly with the borrower or obtained from licensed note brokers or online loan marketplaces.

Promissory Notes

This “promise to pay” is a signed legally binding contract between a borrower and your IRA and includes very specific terms.

It is the responsibility of the IRA account owner and the borrower to determine the terms of the loan including duration, interest, payment schedule and collateral, if any. If purchasing existing loans from a note broker, the IRA owner selects the note and completes the paperwork provided by the note broker. The custodian is then provided with an Investment Direction and all documents related to the loan in order to deliver funds to the borrower.

Principal and interest payments must be paid directly to the custodian for deposit to the IRA account unless a third party note servicer is employed. In this case, the note servicer will receive the loan payment and send net proceeds to the custodian for deposit to the IRA account.

There are two types of Promissory Notes:

1. Notes secured by non-real estate

This type of promissory note is backed by collateral. In the event the borrower does not pay back the loan, the lender receives the collateral in lieu of payment.

2. Notes that are unsecured

This type of promissory note is not backed by collateral. In the event of default, the lender has no recourse but to take legal action against the borrower.

There are some specific prohibited transactions

When considering note investments the IRA account owner should remember that the following are prohibited:

  • Borrowing money from your IRA
  • Lending IRA money to a family member or other disqualified person
  • Using IRA funds as collateral for a loan
  • Lending IRA funds to an entity in which you are a highly compensated employee, controlling member or 50%+ owner

We always recommend consulting with a tax professional prior to directing any alternative investment.

Investment Document Requirements

When you are ready to make your investment purchase there are certain investment supporting documents which you are required to submit. It's important that all documentation is received simultaneously by us along with your investment authorization so as not to cause any delay in processing. Please pre-review investment document requirements here.

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