Monthly payouts from PSP to IRA for client over 70 1/2
A 73 year old client has 1M in his newly established IRA with TD Ameritrade and 100k invested in non-traded mortgages that are still titled to his company profit sharing plan. The profit sharing plan is with a large national custodian and it was the profit sharing plan where the 1M IRA came from via direct transfer. The mortgage investment pays him $750 per month. What are the best options for how to handle the $750 monthly disbursements since they are still titled to the profit sharing plan, but he no longer has a balance with that profit sharing plan custodian. He is/was a part owner of the company with his son and his son now runs the company and the company profit sharing plan.
My questions are as follows:
1. Can the interest checks for $750 just be payable to his TD Ameritrade IRA account even though they are coming from the PSP? If so, wouldn’t this just be treated as an IRA Direct Transfer?
2. Since the mortgage is a non-publicly trades investment, should he consult with a custodian who can handle a self-directed IRA for an alternative investments and have him transfer the titling of the mortgage to the self directed IRA?
3. Any suggestions on how else to handle this?
He has already met his 2018 RMD for the mortgages in the profit sharing plan.
Thank you!!!
Permalink Submitted by Alan - IRA critic on Wed, 2018-04-11 16:19
TD must provide custodian services for alternate investments or they should not have accepted the mortgages transfer. The client should ask TD how they will handle this or if they need to do a direct transfer of the mortgage to a self directed IRA custodian. Otherwise TD should notify the mortgagee that loan payments should be made to TD as the current IRA custodian holding the mortgages. If some payments are made to the PSP in the meantime, the PSP should do direct rollovers to TD of the payments. Again, client needs to work this out with TD,
Permalink Submitted by Jonathan Sard on Wed, 2018-04-11 17:03
Sorry for any confusion. TD only has the regular mutual funds that were recently transfered to his IRA at TD. The mortgages were a separate investment titled to the profit sharing plan.