All Forum Posts by: Chuck Cirulli

In Tarrant County Texas the appraisal district will accept sales price.  If it went through a title company, it would be easier to prove the actual selling price.  Logically, if it was sold on the open market, the sales price should be the true value.

I am a novice.  

I have done several deals in the past  with partners that simply had multiple names on the deed with percentage ownership.  Such as,:

John Doe 50% undivided interest and Sam Smith 50% undivided interest.

My deals have not had a lot of transactions while held so the accounting was simple.

I am a SDIRA novice and the amount of technicalities involved are discouraging. In this case, it seems that there are no such limitations for someone who is day trading stocks with an IRA brokerage account. If so, what's the difference?

I am neither a pro, attorney,  or accountant. 

since no one else has posted yet, if all else fails,  it should be a slamdunk to get a judgment against them. Then you would have a judgment lien for 10 years, if New York law is the same as Texas.  

This will not help you for tomorrow's hearing, but might give you some peace of mind.

@Rajeev Kotyan  Yes , just so it adds up to 100%. 

I am fairly new at this and on my second investment ever my custodian allowed me to have a percentage under my IRA and the remaining percentage under me personally. I did not know any better at the time. Now I am thinking that that is improper.

Be sure to get title insurace.

.....both have to invest simultaneously in the same percentages from the beginning....

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I don't think it has to be 50-50. It just has to add up to 100%. It can also be three or four owners, one or two of which are not SDIRA. With non IRA co-owners, properly accounting for and allocating income and expenses can be quite complicated.

Here us a good review of "prohibited transactions" in a real estate IRA, in layman's terms:

http://www.irafinancialgroup.com/prohibitedtransactions.php

See below for the probable outcome, as described by the IRS website.

It sounds like the IRA death penalty. But, as in other offences in life, is there no consideration for unintentional first offences? Given all the moving parts of the typical SDIRA in real estate, even trying real hard, who can perfect and without some fault ?

Has anyone experienced this first hand?

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How do the prohibited transaction rules apply to IRAs?

How do the prohibited transaction rules apply to IRAs?

A prohibited transaction with respect to an IRA occurs if the owner or beneficiary of the IRA engages in certain transactions. However, in this case, with an individual retirement account, instead of imposing an excise tax on the parties to the transaction, the Code provides that the account is no longer an individual retirement account, and it is treated as if the assets were distributed on the first day of the taxable year in which the prohibited transaction occurred. (IRC Section 408(e)(2))

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See the bottom of this page:

Rajeev and Jaime:

I greatly appreciate your input. You were taking time out of your day to help our community.  I very much agree  that we must be vigilant and persistent to correct errors.  Given my mathematical background I also think that these issues are much easier  than something like differential equations.  I by no means want to take the IRS code for granted, but just like a math problem, given the general scenario i presented, there is a set of variables in a formula and there can only be one right answer .  I can see where this could be an open book question on an exam in law school or a CPA exam and there is only 10 minutes to answer it before moving to the next question. I fully except that there is a price to pay as that is normal when mistakes are made. Just like in an exam, the goal is to arrive at the right answer.  I have faith that our system of laws is fair and the most punitive sections of the code are  for those who are trying to take advantage of system, not those who make  unintentional mistakes.  Thanks again Rajeev for citing the code.  I hope to get back to the group and report the steps , progress and outcome.