All Forum Posts by: Loren Whitney

Nice Mark! It's all downhill now right?? Well, maybe not..

I see things differently when it comes to transactions taking between the IRA and disqualified persons/entities.

From my reading of the code,

4975(e)(2)(A) says I am a disqualified person as a fiduciary of the account.

4975(e)(2)(G) Says that any entity I directly or indirectly own 50% or more of is a disqualified entity.

Since I indirectly own the LLC via my IRA it is a disqualified entity. AND

4975(c)(1)(A) Says that prohibited transactions include

(A) sale or exchange, or leasing, of any property between a plan (THE IRA) and a disqualified person (THE LLC);

Since my IRA owned LLC is a disqualified entity, how can my IRA have a transaction with the LLC?

Also mind that if your plan isn't the sole owner, the accounting nightmare becomes more complicated having to deal with partial amount payments. It's not the end of the world but difficult when others can hand over a check today and you're having to tell people to wait.

I'm originally from Santa Cruz (First Ave). Give Henry Olson a call. He's a CPA / Realtor.

http://realwealthsantacruz.com/

Our business uses Echosign for electronic signatures. We switched from DocuSign because the product and options are far superior (IMO) and the cost if more effective as well. We deal with thousands of clients though.

@David B. 

Do you already have a solo(k) established or are you still at square one?

Checkbook control, among other great benefits are the selling points for the Solo(k) plan. If you're interested in letting someone else do the recordkeeping for you, analyze their technology and customer service. Those will be the two critical factors in making your life easy or difficult.

1. Do they offer a full online bill pay system? (probably most important for speed)

2. Do they accept rental income from tenants online? Do they charge for it?

3. Do you like their online account portal?

4. Do they assign you a personal representative to answer questions and work through time sensitive situations?

If you have in-depth questions, I'm happy to help more. Good luck with your upcoming investment!

Hmmmm Doreen Chaisson Can you provide any clarification on the 'why' it's within the rules? I've never heard of a letter ruling on additional fundings once you become the manager of the entity. I'm curious to know if this is concrete or just logic. It would make logical sense that additional fundings would be okay for investment purposes only but the code clearly states otherwise. I look forward to getting to the bottom of this either way. David Stratton Be aware that just because your custodians compliance department approves something doesn't mean you have sometime to fall back on in the event of an audit. You at want to consider seeking the blessing of an experienced attorney.

Brandon Turner Joshua Dorkin Nice work guys! That's an awesome accomplishment. BP comes up in my real estate related conversations regularly these days. Keep up the good work!

Daniel Guillermo n Look into your options for flat annual fees instead of the traditional tiered schedule. You may find some savings from that angle. Transaction fees are never fun but dollar cost average your total fees over the life of the investment to see where the best value is. Also look at the technology that each provider offers. Some are much slower than others. Best of luck!

Some people are more conservative than others but I would look to section 4975 of the IRC for each and every transaction involving the IRA. Once you become a majority owner, the entity is technically disqualified according to the code. Therefore, any subsequent fundings would be prohibited. Dmitriy Fomichenko What conditions in the operating agreement would make this acceptable?