I have a SDIRA and would like to register an LLC in New Jersey for checkbook control. Is it mandatory to use an attorney to register the LLC? If not, what are the alternatives?
A LLC owned by an IRA is not a DIY project.
Firstly, you can create issues surrounding self-dealing violations through the provision of services if you do the work yourself and pay for state fees personally.
The LLC itself needs to be specially formed with respect to tax ID and operating agreement to be suitable for use by the IRA and acceptable to the IRA custodian as an investment.
Most importantly, firms that specialize in these structures provide guidance with respect to your usage of the IRA owned LLC and proper operation within the IRS guidelines. That guidance is the real value.
The LLC needs to designed utilizing the tenets of the Swanson vs IRS case that established the foundation of the checkbook Ira. I agree with @Brian Eastman that you must be careful and I would recommend using a professional for many reasons. PM me if you need help for local Nj professionals/attorney.
@Carl Fisher, @Brian Eastman
Thanks for the reply, this is very helpful. I had a discussion with the Asset Exchange Strategies who was also able to offer some guidance.
This will NOT be a DIY exercise.
The guidance was well received and some of the steps are complete. The LLC was formed in NJ with the custodian as owner -- Operating Agreement is in progress. What I found to be interesting is that the custodian was listed as the owner of the LLC on the formation document and not my IRA FBO Gary Burnett #12121212. The understanding/guidance is that the ownership by IRA FBO Gary Burnett #12121212 will be outlined in the Operating Agreement.
@Gary Burnett yes, I would use professional, it's not only the LLC set up, its providing the whole package like Operating agreement and other docs. Company that I used charges 400-800 for SDIRA set up with extra fee for state.
Who handled the LLC filing for you?
It is interesting that the custodian (with no IRA information) was listed as the owner on the LLC formation document. Not all states will collect member information on their filing document for an LLC, but I have not seen a custodian listed as a member without any mention of the actual IRA. Perhaps that was an attempt at greater privacy?