All Forum Posts by: Loren Whitney

Excluding checkbook IRAs, you'll find that most SDIRA providers charge a set-up free between $25-50 on average. Annual fees will generally begin at $100-$200/year depending on what is being offered. Some providers even offer a flat fee per investment, regardless of value. Good luck!

1031 exchange is more applicable to IRAs than 401(k)s. Leveraged real estate investments that result in UDFI and therefore UBIT tax can be deferred using 1031. Historically this strategy has remained relatively unknown within the IRA industry, and has not been fully utilized by IRA investors.

@Chet Mazur

What remains uncertain in your scenario?

As I understand it, there is no clear definition nor a certain number of transactions that qualifies you as a dealer. It relates more to being seen as an operating business in the eyes of the IRS.

I agree with Doreen. UBIT should be your concern, not self-dealing. As long as you're investing for the benefit of the IRA and not yourself (arms-length) then you should be good. Do more research on what it takes to reach or be classified as a 'dealer'. Good luck.

Generally speaking, you are allowed to pay out of pocket if the expenses are associated with plan administration itself. If the legal services are related to an investment, the plan assets should be used to pay for the expense. 

100%

However, if your IRA owns the property, it is responsible for any expenses related to the property. It's very important to plan carefully when it comes to cash buffers. Some SDIRA providers have minimum cash balance requirements and others do not. If you acquire non-recourse financing, the lender will most likely have requirements of their own for reserves.

Hey Isaac, good luck with the new job. 

Chances are you won't have the ability to use the tax-advantages of your company 401(k) for real estate. Most company 401(k) plans won't typically alternative assets because of fiduciary responsibility and bookkeeping struggles that arise. Furthermore, your 401(k) contributions/matches will most likely be locked into the provider that your company has elected until you either switch employers again or turn 59.5 years of age.

I just posted an article on UBIT here on BP. Check it out:

https://www.biggerpockets.com/blogs/5105/48636-udf...

I'll just reiterate what others have already said. This won't work since you already own the land. Had you taken proper steps early on it would have been possible but still represents a slippery slope. 

Some investors believe that they have shift ownership and involve the IRA after the fact but this may result in an arrangement if the IRA becomes involves at any point after ownership by a disqualifed person. As Doreen mentioned above, the burden of proof is on your shoulders.

Bottom line, use SDIRA funds on new deals that don't involve personal assets/agendas. Do this and you'll avoid my of the problems that arise in SD investing.