self directed IRA vs LLC
Could you please tell me which option would be best? I am currently investing in some real estate liens. Would a self directed IRA or an LLC be best? I would like to be able to pull a salary from these investments in the future, and, also, hire my young children (when they become of age) under this entity. What issues do I need to be concerned about? Please be specific
Permalink Submitted by Alan Spross on Mon, 2012-11-19 17:59
Your question is way too broad to address in detail here.
You can have a self directed IRA to purchase real estate directly or you can set up an LLC which is owned by the IRA and purchase alternate investments through the LLC including tax liens. However, you must still avoid IRA prohibited transaction rules which could disqualify your IRA. An IRA owned entity cannot hire your descendants as these people are considered “disqualified persons” under the prohibited transaction rules. That’s just one of many pitfalls in using self directed IRAs with alternate investments. If you want to proceed, it’s best to use one of the large custodians such as Equity Trust, Guidant, or a few others.
Here is some more related info:
http://www.irafinancialgroup.com/prohibitedtransactions.php
Permalink Submitted by Jaime Raskulinecz on Mon, 2012-11-26 16:54
You will not be able to get a salary from an investment your IRA makes, even if it is held within an LLC. Likewise, you may not hire your children as they are also disqualified persons.
Any of my staff members would be happy to speak with you about this. We also have a lot of information on our website as well as recordings from previous webinars on the subject.
Our web address is http://www.nextgenerationtrust.com. This is our only business. We would be happy to help.
Jaime Raskulinecz