SEP IRA Contribution

[Vladimir Barman]

Hello BP! To lower my taxes I want to make contribution to my SEP IRA from income that was generated from flips that were owned by multi member LLC's My accountant says that Im now allowed to do this because all the members of LLCs would have to do the same Is this true? And if it is is there a way around it?

Thank you in advance!!

[Brian Eastman]

@Vladimir Barman

Your CPA is correct. A SEP is an employer provided version of an IRA. If the LLC is the employer, which it is since that is where the income is derived, then all eligible employee/owners of the LLC must be provided with equal benefits under the SEP.

There {could} be ways you could restructure your participation in future deals to segregate income to your own business.  There are a lot of complexities and consulting with a qualified tax advisor would be necessary.  Be aware of related service group issues.