Custodian/Trust cos.
For self-directed IRA investment in Real Estate limited partnership we require a custodian. Companies that come up seem to be shady. Major one has F rating from BBB.
Any recommendations? Do any FDIC or SIPC protected firms offer this service, even if higher fees? Also, must funds flow thru the custodian, or can investment go directly from current brokerapge account to real estate entity, without custodian involved, yet still having them listed as custodian- does that satisfy IRS requirements? Or would it require a checkbook account at trustee, and perhaps an LLC? Thanks.
Permalink Submitted by Jose Morales on Wed, 2014-09-10 15:59
The only self-directed IRA Custodian that I have any confidence in is Pensco. I would run away from any FDIC insured financial institution that claims to have the capability to handle self-directed IRAs. By the very nature of alternative investments, they will not be FDIC insured.
Permalink Submitted by Alan - IRA critic on Wed, 2014-09-10 18:49
Note that the IRS is focusing more attention on self directed IRAs and their holdings. See Box 15a and 15b of Form 5498 and the coding instructions to identify the type of assets held in your IRA. Knowing that your IRA holds real estate or other alternative investments, the IRS will be more aware of where to look for any prohibited transactions. Even a good self directed IRA custodian cannot always prevent the IRA owner from committing such a transaction. Be very careful. http://www.irs.gov/pub/irs-pdf/f5498.pdf
Permalink Submitted by philip berens on Thu, 2014-09-11 19:53
Appreciate info urusel and Alan. Not looking good for this invesment, at least from an IRA. Between UBIT issue due to leverage and recapture eventually, and the Custodian/Self-directed issue- seems like IRAs simply arent suited for this type of investment.