Need advice - How to handle account been closed by Equity Trust without my consent

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Need advice - How to handle account been closed by Equity Trust without my consent

Grace B.
New York City · Member since 2017 · 29 posts · 7 votes

How to handle account been closed by Equity Trust without my consent ( They did informed me for 30 days, I was overseas and can't do much logistically to transfer out real estate properties, I just came back to the States) and they told me now I have to deed assets into my own name and then deed to the new custodian. I am still fighting this treatment and fully confused what should I do. In general I can't touch any assets, it needs to transfer from custodian A to B. But Equity Trust refused to do direct transfer. My questions are two folds,

1. Did you have experience negotiate with Equity Trust to re-open account to get the direct transfer -out done quickly

2. If re-open not successful, if I I use the indirect transfer (deed twice) and before triggering the 60 days ruling, do I still avoiding distribution tax? I know when I fail the negotiation, that Equity Trust will send a 1099-R to report distribution sometimes, and

3 I need a IRA experienced CPA to help me to write a opinion letter to IRS to explain the situation. Can anyone recommend an CPA specialized in custodian companies operations and clients who use self-directed IRA for real estate transactions?

4. Do you have similar experience and how did you handle your closed account by Equity Trust?

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Dmitriy Fomichenko
Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
3y

@Grace B.

2. Yes, you will avoid distribution tax as long as the assets are transferred to another IRA. Equity Trust will issue 1099-R reporting distribution but the new IRA custodian will issue form 5498 showing that they accepted the same amount into new IRA, which will offset the 1099-R.

3. There is no need for that. See above.

Regardless of the Equity Trust refusal you can transfer the assets directly to the new custodian and avoid the double transfer of the title. Reach out to me directly and I will provide you with some guidance. 

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    3y

    @Grace B.

    Why did equity trust close your account? I think understanding the reason why may be helpful sounds odd that a custodian would only give 49 days notice before closing an account

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  • Jeffrey DixonPro Member
    Irvine, CA · Member since 2014 · 94 posts · 44 votes
    3y

    Custodians are allowed to close accounts and distribute assets. It is doubtful that Equity Trust would agree to re-open it. You are allowed to put the assets back into an IRA as long as it accomplished in 60 days and you have not done this with any IRA in the past 12 months. You would need to talk to different custodians and see if one is willing to take the assets. They will need to be re-titled into your name and then re-titled to the new IRA custodian. The custodian may require to review the assets before they accept them. They may want to know why the assets were distributed.

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  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
    3y

    @Grace B.

    2. Yes, you will avoid distribution tax as long as the assets are transferred to another IRA. Equity Trust will issue 1099-R reporting distribution but the new IRA custodian will issue form 5498 showing that they accepted the same amount into new IRA, which will offset the 1099-R.

    3. There is no need for that. See above.

    Regardless of the Equity Trust refusal you can transfer the assets directly to the new custodian and avoid the double transfer of the title. Reach out to me directly and I will provide you with some guidance. 

    2Reply
  • Grace B.
    OP
    New York City · Member since 2017 · 29 posts · 7 votes
    3y

    Thank you Jeffrey and Dmitriy. Both suggestions were valuable. My resolution is to proceed with a new custodian and transfer all assets to the new custodian using the double deeds suggested by Jeffrey. Both of your comments really helped me to think straight and move forward. I am forever grateful!

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