Oxford, MA · Member since 2016 · 15 posts · 0 votes
Good evening pros!
I have an LLC funded by two SDIRAs (1 traditional, 1 ROTH). My plan is to convert 20% of the traditional to ROTH each year, so that at the end of 5 years, the LLC will be wholly owned by the ROTH.
As part of the process of the conversion, my custodian requires valuations for each of the IRAs. Seems simple enough, but....each IRA contains some cash, along with a percentage of a piece of undeveloped land that I bought with the money from the IRAs.
So my question is this: who should I be looking at to sign the valuation forms? A CPA would understand the IRAs, but would have no idea what the land is worth. A real estate agent would know value of land, but not understand (or be comfortable with) the IRA piece of the puzzle.
You likely will need to work with both types of professionals. Have a formal appraisal of the land produced, and then hand that to your CPA for valuing the LLC. Due to the progressive Roth conversion strategy, accurate and well documented reflection of value is critical.
You likely will need to work with both types of professionals. Have a formal appraisal of the land produced, and then hand that to your CPA for valuing the LLC. Due to the progressive Roth conversion strategy, accurate and well documented reflection of value is critical.
Oxford, MA · Member since 2016 · 15 posts · 0 votes
7y
Thanks guys. I kind of thought that might be the answer. The tricky part is that the piece of land in question is in Belize, where the real estate market is very lightly regulated, to say the least. It's kind of like the wild west down there. LOL! I suppose that could work in my favor as I could probably pay a local appraiser to value the property at whatever I want it to be worth. I'm joking, of course. Im not even sure if their appraisers down there are even licensed. I know the real estate agents aren't even licensed. And that's no joke.
The cash is easy, the land needs to be appraised, I doubt the LLC has much value other than the assets (land and cash). Work with your Ira administrator who can help you find the right people/companies and/or process.
Attorney and Real Estate Broker · Madison, WI · Member since 2016 · 265 posts · 100 votes
7y
Just a comment. My understanding is that Belize is lightly regulated but most of the land is controlled tightly by nationals. And, if you attempt to utilize the land and are not a favored national, they will find ways to make things very difficult for you. So, the land very well could be worth not much at all depending on some of those factors.