Completing W-9 for Tax Lien Sales with a SDIRA

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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

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Hi everyone,

I'm reaching out to other investors here who are using a Self-Directed IRA (SDIRA) and have participated in tax lien sales, especially those who have actually bid on properties or successfully completed a W-9 form in this context.

I’m in a situation where I’ve been given conflicting instructions by different representatives at my SDIRA custodian regarding how to properly fill out the W-9 form when registering to bid. Some have said to use the custodian's name and EIN, while others have suggested listing the SDIRA account name (e.g., "XYZ Trust Company FBO John Doe IRA") and using a different TIN.

This inconsistency is concerning, and before I proceed further, I want to make sure I’m handling it correctly and in full compliance, especially given the tax implications.

If you've:

Participated in tax lien or tax deed auctions through your SDIRA
Completed the W-9 form with advice from a qualified attorney
Or simply have direct experience navigating this process

I’d greatly appreciate your input. How did you complete the W-9? What name and TIN did you use? Did you receive any legal guidance?

Not looking for general speculation—just hoping to hear from those who’ve been through it personally, ideally with legal backing.

Thanks in advance for any help or insights!

We have invested with a SDIRA and have had to complete W9 as well as we run a fund and have to get them from investors. Here is the example we followed which is we used the custodian name and ein:

Completing IRS Form W-9 for a Self-Directed IRA or Solo 401(k) - IRA Financial

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Shango Collier
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Investor · Indianapolis, IN · Member since 2020 · 81 posts · 13 votes
1y
Quote from @Chris Seveney:
Quote from @Shango Collier:

Hi everyone,

I'm reaching out to other investors here who are using a Self-Directed IRA (SDIRA) and have participated in tax lien sales, especially those who have actually bid on properties or successfully completed a W-9 form in this context.

I’m in a situation where I’ve been given conflicting instructions by different representatives at my SDIRA custodian regarding how to properly fill out the W-9 form when registering to bid. Some have said to use the custodian's name and EIN, while others have suggested listing the SDIRA account name (e.g., "XYZ Trust Company FBO John Doe IRA") and using a different TIN.

This inconsistency is concerning, and before I proceed further, I want to make sure I’m handling it correctly and in full compliance, especially given the tax implications.

If you've:

Participated in tax lien or tax deed auctions through your SDIRA

Completed the W-9 form with advice from a qualified attorney

Or simply have direct experience navigating this process

I’d greatly appreciate your input. How did you complete the W-9? What name and TIN did you use? Did you receive any legal guidance?

Not looking for general speculation—just hoping to hear from those who’ve been through it personally, ideally with legal backing.

Thanks in advance for any help or insights!

We have invested with a SDIRA and have had to complete W9 as well as we run a fund and have to get them from investors. Here is the example we followed which is we used the custodian name and ein:

Completing IRS Form W-9 for a Self-Directed IRA or Solo 401(k) - IRA Financial
Thank you so much for responding to me. I'm so glad to read that I successfully completed this correctly based on the example from the web page. I appreciate it. May I ask, have you ever participated in the tax lien sale with your IRA?
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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
1y
Quote from @Shango Collier:
Quote from @Chris Seveney:

Quote from @Shango Collier:

Hi everyone,

I'm reaching out to other investors here who are using a Self-Directed IRA (SDIRA) and have participated in tax lien sales, especially those who have actually bid on properties or successfully completed a W-9 form in this context.

I’m in a situation where I’ve been given conflicting instructions by different representatives at my SDIRA custodian regarding how to properly fill out the W-9 form when registering to bid. Some have said to use the custodian's name and EIN, while others have suggested listing the SDIRA account name (e.g., "XYZ Trust Company FBO John Doe IRA") and using a different TIN.

This inconsistency is concerning, and before I proceed further, I want to make sure I’m handling it correctly and in full compliance, especially given the tax implications.

If you've:

Participated in tax lien or tax deed auctions through your SDIRA

Completed the W-9 form with advice from a qualified attorney

Or simply have direct experience navigating this process

I’d greatly appreciate your input. How did you complete the W-9? What name and TIN did you use? Did you receive any legal guidance?

Not looking for general speculation—just hoping to hear from those who’ve been through it personally, ideally with legal backing.

Thanks in advance for any help or insights!

We have invested with a SDIRA and have had to complete W9 as well as we run a fund and have to get them from investors. Here is the example we followed which is we used the custodian name and ein:

Completing IRS Form W-9 for a Self-Directed IRA or Solo 401(k) - IRA Financial

Thank you so much for responding to me. I'm so glad to read that I successfully completed this correctly based on the example from the web page. I appreciate it. May I ask, have you ever participated in the tax lien sale with your IRA?
Long ago, I now moved and buy notes instead as I found tax liens way too boring for me.
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Shango Collier
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Investor · Indianapolis, IN · Member since 2020 · 81 posts · 13 votes
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@Chris Seveney duly noted.
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Jason MalabuteBusiness Member

Accountant · Los Angeles, CA · Member since 2016 · 2k+ posts · 901 votes

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When filling out a W-9 for a Self-Directed IRA (SDIRA), you should not use your personal name or Social Security Number. Instead, the W-9 must be completed using the custodian’s name (e.g., “ABC Trust Company”) and the custodian’s EIN—not the IRA account holder’s info or the name of the IRA (like “XYZ Trust Company FBO John Doe IRA”). That’s because the SDIRA is a tax-exempt entity, and the custodian is the legal owner of the assets for tax purposes. Using the wrong name or TIN could cause compliance issues or misreporting. So if you’re registering to bid and need to submit a W-9, make sure the custodian’s information is what goes on the form. If you’re still unsure, the article recommends checking directly with your custodian or getting written confirmation from a tax professional.

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Shango Collier
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Investor · Indianapolis, IN · Member since 2020 · 81 posts · 13 votes
1y
Quote from @Jason Malabute:

When filling out a W-9 for a Self-Directed IRA (SDIRA), you should not use your personal name or Social Security Number. Instead, the W-9 must be completed using the custodian’s name (e.g., “ABC Trust Company”) and the custodian’s EIN—not the IRA account holder’s info or the name of the IRA (like “XYZ Trust Company FBO John Doe IRA”). That’s because the SDIRA is a tax-exempt entity, and the custodian is the legal owner of the assets for tax purposes. Using the wrong name or TIN could cause compliance issues or misreporting. So if you’re registering to bid and need to submit a W-9, make sure the custodian’s information is what goes on the form. If you’re still unsure, the article recommends checking directly with your custodian or getting written confirmation from a tax professional.
Thank you Jason! I appreciate the feedback.
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Ned CareyPro Member

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Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes

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@Shango Collier I buy lots of tax liens. Yes I have bought them through my IRA. My IRA is set up so that it owns an LLC. I register for the tax sale in the name of my LLC and using the tax ID for that LLC.

The last three years have been so competitive I have not really made any money with tax liens in my IRA.

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Shango Collier
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Investor · Indianapolis, IN · Member since 2020 · 81 posts · 13 votes
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@Ned Carey hi Ned, so that's the exact same way mine is setup but I was told to not use the EIN of my LLC and instead use the EIN of my custodian. I'll be speaking with a CPA soon regarding this but I've been trying to speak with someone at my custodian to get clear directions.
1 Reply
Ned CareyPro Member
Moderator
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
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Quote from @Shango Collier:

@Ned Carey hi Ned, so that's the exact same way mine is setup but I was told to not use the EIN of my LLC and instead use the EIN of my custodian. I'll be speaking with a CPA soon regarding this but I've been trying to speak with someone at my custodian to get clear directions.

Actually let me correct myself. Presuming your LLC is solely owned by your IRA, it is s disregarded entity. So the taxes flow back to your IRA. So I guess it is back to the IRA custodian to tell you how to report.
I am neither a tax attorney nor CPA so the above should be checked by a qualified professional.
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Completing W-9 for Tax Lien Sales with a SDIRA

Completing W-9 for Tax Lien Sales with a SDIRA

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