All Forum Posts by: John Johnson

Can anyone recommend a good alternative to Quest Trust Co, now known as Inspira?

They have all sorts of problems now. You can reach them by phone. They won't answer emails. They are having some serious issues.

Thanks for the feedback. Those transactions are not subject to UBTI (aka UBIT) as I held many of those properties as far back as 5+ years ago, and sold them for a long term capital gain; though that gain is deferred of course until I'm an old man - haha. Then loaning money (creating promissory notes) by buying/selling houses on mortgages is again a viable form of use of an IRA LLC, as these are long-term notes held for investment purposes - in my case 10-20 years. By the way each note is generating me an APY of 25-35% (by selling a house for double my cost, and charging 10%+/- interest, and closing through a loan officer whose Dodd Frank/etc compliant). UBTI only apply in certain circumstances - say if I were wholesaling, flipping (generating earned income), leveraging my IRA, etc - within the confines of my self directed IRA.

Anyway...if there is a CPA/EA/tax guru who knows the answer...I'm all ears. Thanks!

I have a question for you tax gurus out there. Obviously with the real estate market being hot, it is/was a good time to sell some rentals acquired during the market downturn.

**My Situation**
I sold some a large quantity of "cheap" rental properties that were owned by my self directed IRA, and turned around and put that cash directly into owner financed notes (I bought houses & sold them on a note). These were debt-free properties.

This of course is going to generate multiple 1099S forms, from both the sale of the original rental properties AND from the closing/sale of the owner financed notes.

I know this income is not subject to UBTI, so I won't have to file a 990-T, but altogether this is probably going to generate 40-50 1099S Forms associated with the EIN that my IRA LLC has - accounting for millions in sales in fiscal year 2014.

My IRA custodian will file a form 5498 to show the value of my self directed IRA (it has in essence quadrupled in value; I doubled my money from the sale of the rentals, and doubled my money again by selling houses bought below market, for an above-market price, and creating notes [assets] at a high interest rate)

**My Question**
I keep great records, etc, etc...but is there anything I need to do / file to account for these transactions with the IRS, beyond having my IRA custodian file their normal form 5498 showing the increased value of my IRA? OR should I just wait and see if the IRS sends a nasty-gram wondering if taxes are due or not, and of course they're not due, but just be prepared to send a professional response? Haha.

Thanks for any advice!