Stanley,
It is prohibited to move your IRA RE investments into your
personal LLC. Many people will have
their IRA form a Check book IRA LLC and then purchase real estate. You are correct to look for professional help
but not only from a CPA but also an attorney preferably tax attorney familiar
with IRA’s etc.
Your custodian/administrator should be able to give you a list
of proposed CPAs/Attorneys that other clients use. Cold calling CPAs about IRAs in most cases
will take you a lot of time before you find a good one.
If you are going to ask questions you need to know the answers
so you can make a good decision.
Ask the following questions:
1.
What are the primary publications discussing IRAs –Answer: publications
590 and 560.
2.
How many IRA Taxpayer Identification Numbers (TINs) do you get a
month from the IRS? Answer: Should be at
least a couple. When should my IRA get a
TIN? Answer; if IRA incurs debt, has Unrelated business income (UBI), receives
a K-1,is required to issue 1099s, etc
Answers to Chris T questions:
1. When investing through a self directed IRA does it matter
what type of IRA it is e.g. standard IRA, Roth IRA, SEP IRA (self employed
pension). Answer: All can be self directed.
2. How is debt treated in an IRA investment. Answer: Unrelated
Business Income tax(UBTI) specifically Unrelated Debt Financed Income(UDFI)
will have to be calculated on the percentage of debt to purchase ratio. It is reported on IRS Form 990T. Then ask him how many 990T forms he generates
a year—I would hope, at minimum, he does half a dozen.
3. How do I stay clear of issues that threaten
to disqualify my IRA as a tax deferred investment vehicle. Answer: He/She should say “ask me for advice”
or at least tell you to read IRS code section 4975. Most attorneys especially if they set up the
checkbook LLC, like Mark Nolan is asking, should review your ongoing purchases
for free or a nominal fee. Be careful with these LLCs as the IRS has made it
mandatory that the custodian/administrator report these entities to the IRS as
of 2015.
4. How must the IRA investment be listed on the ownership
entity/docs. Answer: There are several vesting options-ABC Administrator FBO
Stanley IRA #12345, or ABC Custodian FBO Stanley IRA, or ABC Administrator FBO IRA
#12345, or etc.
5. Can the IRA be a stockholder in a private corporation or a
member of an Llc- Answer: It depends No if it is a “S” corp, Yes if it is a “C”
corp but there is also ownership percentages and control issues that must be
considered. If they know about the
Swanson vs IRS, Rollins vs. IRS and the “Adler” decision then they should be up
on the issues involved.
6. Is there an affordable service that can be utilized to
keep the IRA in regulatory compliance. Answer: Look for a tax attorney and have
him/her part of your team as well as looking into administrators/custodians
that provide education on the subject.
Self directed IRAs have not been litigated much so there is not a lot of
precedence which makes for more gray area.
Good luck in building your team with best professionals and I
hope this helps you find them.
