Real Estate Interest in Self Directed SEP-IRA
A client of mine is a 44 year old attorney with a self-directed IRA with Pensco Trust. Outside of his IRA, the client has a single-member LLC that owns an interest in an apartment complex. He wants to know if he can put this LLC with the real estate interest inside his self-directed IRA, and if so, how he can go about doing it (Penso will not provide this type of advice). He is willing to pay an IRA expert (attorney or CPA) for a phone consultation, if necessary. Any help is greatly appreciated! Thank you!
Permalink Submitted by Alan - IRA critic on Sat, 2016-08-20 00:41
Just like with any IRA account, new regular contributions must be in cash. Client cannot transfer non cash assets into an IRA. And he cannot use current IRA cash to purchase his interest in the LLC since that is a prohibited transaction due to self dealing. Obviously, if the apartment was already held in a retirement plan, he could just do a rollover, but since it is not, he is limited to regular cash contributions.
Permalink Submitted by Martin Helmer on Sun, 2016-08-21 18:32
If the apartment was already held in a retirement plan, 1. It would be a prohibited transaction/s inside that retirement plan and 2. rolling it over would cause the entire IRA to be deemed distributed in that year.
Permalink Submitted by Jonathan Sard on Mon, 2016-08-22 13:16
Do you have someone the client can talk to about this? He is willing to pay an hourly consulting fee as he just wants to have a better understanding of all the rules and so he will be knowledgeable about making decisions in the future. Thank you!!