Real Estate Investor, CA · Member since 2012 · 93 posts · 20 votes
I know this subject has been beat to death in the forums, but can someone in simple layman terms tell me how I can set up one of these?
I have both solo 401K and SEP-IRA retirement accounts. I have been an employee of my corp. for years and have collected a nice sum in my retirement accounts. I want to loan money to myself for some rentals I own and repay my 401K interest from such a loan. From my understanding I am limited to 50K to do this? Is that correct?
If that is the case, then I wanted to create a checkbook LLC so I could by some rental properties or do hard money lending from my SEP-IRA. I am only interested in loaning myself money and setting up a checkbook LLC. I am not interested in setting up a custodian account and buying property in it.
Also what are the lowest fee companies that set these up? It seems I need a company to set these up, and then a lawyer or something to do the checkbook LLC portion?
Rehabber · Tucson, AZ · Member since 2008 · 1k+ posts · 802 votes
14y
In my opinion, you will need to carefully consider your plan because you are meeting the definition of self-dealing as the aforementioned would be considered a prohibited transaction (see IRC 4975).
Checkbook control, in my opinion, will also be like putting a bulls-eye on your forehead attracting the attention of IRS auditors.
Based on your own ambitions stated above, it is advisable that you seek expert advice immediately.