All Forum Posts by: Rajeev Kotyan

@Lukas Vanagaitis: Transfer is as easy as a wire transfer... all banks have that capability... with regards to taxes, you would want to look at the bi-lateral tax treaty between the US and the other country and see what it states with regards to that..

Please work with appropriate professionals to identify the solution for your specific situation..

@Daniel Dietz: Based on the information that you provided there should not be any issues... but the devil is in the details and a lot of it is probably already documented in the Operating Agreement of the current LLC...

@Bryan O.: With a Solo(k) there are either one of two requirements to completed to satisfy the accredited investor

(1) The plan participant (i.e. you) are accredited; or

(2) The plan itself is accredited --- this means that the plan has assets in excess of $5,000,000 and the trustee is a sophisticated person

The definitions can found on Code of Federal Regulations Title 17 Section 230.501 and Section 230.506(b)(2)(ii).

Also the firms that you are interested in investing with should be able to provide the clarity that you are asking for as they are the ones who have to document all of this...

@Avi Garg: You can sell all you want, just cannot get paid for it either directly or indirectly... so long as you are doing what would be classified as administrative tasks (i.e. not attempting to replicate what a professional RE broker or agent would do), you would be within the confines of the regulations

@Daniel Dietz: Correct on ROTH IRA.. should have put the exception in my statement...

With respect to the additional capital contributions.. while the general statement is as I have mentioned, as usual with any of these laws and regulations, there are exceptions. The exceptions that make it possible under plan assets and plan fiduciaries increase the amount of documentation that is required, that sometimes the cost of following these exceptions and exemptions outweighs the return of investment. The Myth #1 that you state is something that we have been working with the IRS and DOL for the last couple of years to get a clear guidance from them, and as such until we get a clarity from the good folks who actually have the authority to charge fines and fees, we generally stay away from these scenarios. Better to be safe than sorry!

@Daria B.: For IRA, you do not have to be employed to open an IRA account. You have to have earned income to contribute into an IRA account. You can open as many IRA accounts are you want, and rollover or transfer into them all you want from other IRA/401K accounts, you just cannot make new cash contributions unless you have earned income.

Checkbook IRA LLC is an investment... not an account feature.

@Daniel Dietz: Couple of items:

(1) You can still rollover your LLC ownership from an IRA to a 401K (there is nothing stopping you from doing that) -- making a generic statement do not know your specific situation

(2) You mention that your IRA and your fathers's IRA are partners in the LLC (picked on your father as your brother is not a disqualified party). Hopefully you documented adequately that the participation of your father's IRA did not enable your IRA to complete the transaction or vice-versa.

(3) Based on what you describe, additional capital contributions from anyone of your IRAs or 401k will not be permitted, as that will be a prohibited transaction, due to the fact that the Manager of the LLC is now a fiduciary (greater than 25% of the ownership is IRA owners) and additional capital contribution to a fiduciary (disqualified party) is a prohibited transaction.

Hope this helps...

@Daria B. When you request your custodian/brokerage firm/bank for an early distribution, their form should contain distribution exception section. Most I have seen do... This way they can issue the 1099-R with the correct code in Box 7 for you.

https://www.irs.gov/pub/irs-pdf/i1099r.pdf

Also: See the filings you would have to do at tax time:

https://www.irs.gov/pub/irs-pdf/i5329.pdf

As usual work with a qualified and knowledgeable professional on this...

@Louis Alvarez: The statement is correct, but the caveats have been omitted. One of the primary caveats when doing a partnership with a disqualified party (i.e. yourself) and your IRA, is that you have to document that you are not enabling your IRA to complete the transaction, or that the IRA is not enabling you to complete the transaction. This is critical. There is no one method to document this, as each case is different.

@Daria B.: On the 10% exception chart.. the Yes's mean it is not subject to the 10% penalty

With regards to titling of the property:

(1) Self Directed IRA: [Name of Custodian] FBO [Account Owner Name] [Type of IRA]

(2) LLC: [Name of LLC]

The term Checkbook IRA LLC has been coined by a few folks in the industry, which generally means that the IRA is the single member of an LLC, which carries out business, including holding of real estate.

With regards to any 401K (including Solo 401k), there are two primary buckets (Employee and Employer). Employee bucket is where an employee contributes from their earned income, which is limited to $18000 per year + catch-up (if you are over 50). This limit is across all employee buckets across all employers that the employee works for. The Employer bucket is for employer to make contributions such as matching contributions, profit sharing, many other variations. There are various calculations to limits, but the general maximum is approx. $29K per employer (limit changes every year based on regulations).