Self Directed IRA LLC from an inherited 401k (non spouse)

[Sarah Lyon]

Hello BP community!

So, I am desperately trying to find ways to leverage my assets in order to pay for a flip in Durham, NC that I think well worth it. However, I am running in to constant walls when it comes to finding ways to doing this.

At first I was hoping to use the inherited 401k for a personal loan, but then discovered that wouldn't be an option as its not my 401k nor my spouses. Then I found out about the SD IRA LLC. I really thought this was going to be an ideal option and I thought I was finding evidence supporting that I could get one for my inherited 401k, however I just got off the phone with Guidant Financial, and the guy basically stopped me when I said I inherited from my mom (who inherited it from my dad) and said they could only do this for spouses.

Does anyone know any company that can set up a SD IRA LLC for a non-spouse beneficiary? Or perhaps even another tax-negated way of using my inherited 401k's (cause I have a couple) for a flip? My mom will have been gone 4 years this coming September, so I believe that only leaves me one more tax year to clear out the account and face the huge tax repercussions.

Super eager for any advice! Thanks so much.

[Dmitriy Fomichenko]

@Sarah Lyon

It is possible to setup self-directed IRA LLC (aka Checkbook IRA) for inherited IRA (we have several clients like this). However the same IRS rules will apply such as it will be subject to RMD and you will be considered "disqualified person" to the IRA. That means that while you can control the IRA and it's investments, the IRA can not pay for "your" flip and be invested in any transactions where you are personally involved.