All Forum Posts by: Jeff Nash

1) Obtain the new EIN and then you can explain to the IRS that you obtained a new EIN and that it will be used in place of the original one.  I will message you with more details.

2) You will need to provide the new EIN to the bank and any other interested users (i.e.- W-9s).

3) Correct, the default classification is a partnership with a multi-member or manager LLC.

As to your question, there is more than one way to handle certain things so it just depends on what might be more efficient or preferential.  

At the state level you would just make an administrative change to add the members or managers to the LLC now or with the annual filing (assume you are in WA). @Ashish Acharya suggested the easiest way to correct - https://www.irs.gov/businesses....  Then you will file form 1065 using that EIN.

Yes, but just be careful on the amount of personal use during the first 2 years (not more than 14 days or 10% of the number of days that the vacation home is rented at a fair rental value).

There are only a few asset classes and types of investments you can't invest in in a self-directed retirement account (401k or IRA):

1) Life insurance

2) Collectibles

3) investments in entities that are S-corps

There are also rules surrounding prohibited transactions and disqualified persons which it appears you investigated. I assume you have checkbook control and the flexibility to make the investment. The custodian on a SDIRA in any case is responsible for tracking the investments for their own compliance and annual tax reporting of the fair market value. Depending on the investment and it’s characteristics an appraisal may be required. The custodian may just have their own restrictions, but if one were to say it is disallowed I would inquire on what basis and see their rationale. Maybe there is some perceived risk or complexity that they don’t want to be involved with.

When you make any investment in a self-directed plan I would double check with your tax professional and the custodian in advance to ensure you are not unintentionally making a critical mistake (ie- causing some or all of the account to be taxable).  

I'm not sure what the nature of your situations is and if it is an active trade or business, but the consideration of general versus limited partners might be important as well.  If your wife is not really involved because she works full-time she might really be considered a limited partner which might be better for self-employment tax purposes.  The husband/wife endeavors often require some additional planning.  Check with a tax advisor and attorney. 

  

Each state has different operational protocol, fees, and annual filing requirements depending on whether you are a domestic or foreign (out-of-state) entity.  Both of these states have annual reporting requirements which must be done to maintain good standing.  It is common to see people form entities that have no activity but they fail to maintain compliance because they are unaware that there are still reporting requirements.  Here are some helpful links below for reference purposes.  Note that I am not an attorney and don’t know all the details of your situation so I advise that you consult with one, and/or your tax professional to ensure you are handling the situation properly from all perspectives (legal, tax, and operational).

 https://dos.myflorida.com/sunb...

https://www.sos.state.tx.us/co...

Our clients primarily use Interactive Brokers for the competitive rates and not having to allocate anything to any security or financial instrument.  Here is a link to their pricing - https://www.interactivebrokers....  

The caveat to the above statement is that you have to open a Pro account rather than a Lite account where the difference is being associated with a financial professional or not. 

There are other ways to earn higher short term yield (9 months or less I’m holding period) but that would involve taking more risk than parking funds in idle cash.  If preservation of capital to the highest level is your objective than money market accounts and CDS etc as previously noted all appear to be adequate possible solutions without knowing anything else about your situation.  

Hi German, I'll send you a request to connect.  

Yes, the word “like-kind” is a bit misleading as it just has to be real property that you are exchanging.  There are criteria that has to be met in order for an exchange to work but assuming it is then you can do an exchange as described. 

As a quick follow up, I want to disclaim that I am not a valuation expert or appraiser, but I imagine the scenario you described regarding the value of the investment would be less likely early on where you have a day 1 unrealized loss of that magnitude.  Depending on the sophistication of the sponsor and size of the fund, they likely would be able to provide you with the value of the units or investment annually.  The fair market value of course would be expected to differ from the accounting or tax basis of the investment as reported to you.

If there is a potential timing opportunity or tax arbitrage such as in your example, then you could convert based on whatever is permissible under your 401k plan. This would be no different than if you held a publicly traded stock in a traditional IRA and it was beat down but you expect it to eventually recover (and perhaps too your income in that given year is also down or less than normal) so it might be wise to consider converting to a Roth.