Recommendations for a tax attorney to set up an LLC for a self directed IRA?

Question

I just got an accepted offer on a property that I want to buy with my IRA. However, I haven't moved my IRA into a Self-Directed IRA yet. I'm closing at the end of November on the property. Can anyone refer me fast to good tax attorney to set up an LLC for a Checkbook IRA account?

Many thanks!

Karen Lee

Many thanks!

Karen Lee

Karen Lee · Answer

Account Closed thanks for pointing that out!!

Dmitriy Fomichenko · Answer

@Karen Lee

you are saying that you have accepted offer on a property that you will be buying in your IRA, but you don't have IRA set up yet.  What name is on the offer, yours? What about earnest deposit - did you write personal check for it?

If that is the case then you can not buy this property in an IRA. You are attempting to do things backwards. To do it right you need to set up IRA first. If you want to have a checkbook control then you need to set up special purpose single member LLC, then you need to fund the LLC and only then you can make an offer on a property.

Jaime Raskulinecz · Answer

Karen: Your time frame is aggressive since you haven't set up your SD IRA yet. In addition, the contract should be in the name of the LLC purchasing the property. At the very least in the name of the SD IRA. It is prohibited by the IRS to have a contract in your personal name and transfer that to an IRA.

If you want to know more you may contact my office.

Regarding a good attorney, my office and clients have had positive experiences with Mathew Sorensen in Phoenix, AZ. 602-761-9798.

Jaime

Account Closed · Answer

HI Karen,

I'm also in Mass. and have both a great real estate attorney and CPA firm.  I see you found an attorney and you may be all set, but I'll send you the people I use, just in case you need them for the future.  It's nice to work with local people you can meet in person, rather than long distance.

Dmitriy Fomichenko · Answer

@Karen Lee

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Karen Lee · Answer

Thanks to @Robert Leonard, @Dmitry Fomenchenko, @Jeff Astor, @Jaime Raskulinecz for all of your words of wisdom.  I am happy to report that I am now in process with Vantage IRA to set up my self directed IRA as well as a local attorney in Boston, Alan Segal, to set up my LLC. I worked it out over the past three days and everything should fall into place by my close date.  I will keep you all updated and many thanks again!

Robert Leonard · Answer

@Karen Lee I definitely wouldn't attempt this transaction "in reverse" like this.

The attorney who was part of the mandatory legal consult when I set my SD-IRA up with an LLC and checkbook control is Frank Selden.

http://www.frankseldenlaw.com/SD-IRA.html

I set mine up through Guidantfinancial and they had a very impressive educational component of their account establishment process.  Unfortunately, they sold that part of their business and I am with iDirectLaw (http://idirectlaw.com/) which is somehow affiliated wth Providenttrust and since my account was transferred, I'm not sure how the account setup process goes?

If @Dmitriy Fomichenko or I aren't convincing to you, maybe Mr. Selden can offer you some advice you'll find helpful? For me, the  custodian set the account up and the attorney was there to provide legal counsel for the account setup process and questions about use of the account.

Karen Lee · Answer

I have put an offer in to purchase a condo and it has been accepted. This was 12 hours ago. I realized my mistake and asked my realtor to place "Karen Lee or nominee" on the purchase and sale agreement and he agreed to do so. I do have my personal check for the earnest money but I hope I can wash it all out as things progress. I asked to close on Dec 1 to give myself time to set this up. What I need is a referral to an attorney to set up my LLC.  Does anyone have suggestions for me?

Dmitriy Fomichenko · Answer

@Karen Lee

the contract in your name with the nominee and you personally paying the earnest deposit will not work. If the seller is willing to re-write the new purchase agreement in the name of IRA LLC and accept new deposit from the LLC then it might work. BUT you don't have the entity or the account set up yet - that is the problem. And the process of setting up and funding IRA LLC can take 3-4 weeks. If the seller is not willing to wait that long then you don't have many options. Also, will you be paying cash or financing the deal? If you are using financing - it has to be non-recourse.  That part will also take a while.

Jeff Astor · Answer

Hi Karen,

If you want to use an attorney for this, what you need is an ERISA attorney, not a tax attorney. But probably better and less expensive than either is a company that does these things all the time.

Now, if you've already accepted an offer there are some very important things you need to know no matter who you use. E.g. you cannot put down earnest money from personal funds (only SD IRA funds); if you did so already, there are ways to fix it.

In short, you need to move quickly finding the right person or company to help you wade through this properly and cost-efficiently.

Recommendations for a tax attorney to set up an LLC for a self directed IRA?

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