utilities in property held in IRA/LLC

7 Replies

Hello all - I just closed on a rental purchased by my IRA/LLC. Probably 10 days to 2 weeks away from advertising for renters. In the meantime, can I put utilities in my name personally, as long as any and all expenses are paid by the IRA?

Thank you for your help.

Yes you can put them in your name, I'm not sure if the utility companies would let you put them in the name of an LLC.

That's exactly the problem I'm across Steven, thank you for your reply.  Just wanted to double check.

I would seek legal advice on this. I do not think this is a good idea, and could be a prohibited transaction. You absolutely must pay the utility bills from your IRA, not a personal account. The utility company should not have an issue with having the utilities in the name of an LLC.

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@Scott Smith

It is a prohibited transaction to have utilities in your name when it is owned by your Ira. Most utility companies want the utilities in the owners name and TIN/EIN. DONT screw it up and disqualify your IRA. Your Ira administrator/custodian should help you or educate you on how to do it. PM me if they can't help you.

Thank you for the responses. Amazingly the city allows for a substantial grace period for rental properties for water, so I won't have to put this in my name. Electric and gas have no problem being put in the LLC name, so it looks like I'm in good shape. I appreciate the help.

@Scott Smith

See if they will title it in your name for the benefit of the LLC. What matters is that only LLC funds (not personal funds) are used to pay utility expenses.

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