Does anyone have an LLC IRA?
If so, who did you set it up with, for how much, and how much do you pay to custodian (flat or percentage?)
Thanks
Hi,
I think your referring to a self directed IRA which has choosen to create a LLC to directly control cash for investments from the IRA? Is this correct?
It’s very simple once your self directed IRA is set up, you ask a qualified attorney to set you up a SD IRA LLC and the supporting documents to allow transfer of funds from the IRA to the LLC.
GR
Although in theory it’s simple, I’ve yet to meet anyone who has actually successfully done it.
The first time you personally guarantee a mortage to the LLC, accidentally misrepresent a signature on a contract or lease, or maybe even just write yourself an expense reimbursement check, you’ve created a “disqualifying transaction” and your IRA can be busted.
I imagine the legal costs of keeping everything straight will outweigh any benefit for 99.99% of typical real estate investors.
Then you still have to deal with potential unrelated business income taxes on the IRA. And Remember, avoiding the tax (on taking a distribution) is precisely why you want the IRA LLC in the first place.
I’m not saying it’s not possible. I’m not saying it isn’t a great deal. I am saying that it’s a lot more complicated in practice than the theory, which is probably why I’ve never seen it successfully accomplished.