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Self-Directed IRA LLC, SS-4 questions, etc.

I recently opened a Self-Directed Traditional IRA account at a custodian trust company in the mid-west, and I am in the process of having my IRA funds from elsewhere rolled over into my Self-Directed IRA.

Then, I formed a Self-Directed IRA LLC (SDIRA LLC) a few days ago by doing the LLC filing with the State, and I created the Operating Agreement from samples I obtained which have the correct language regarding prohibited transactions, etc.

The SDIRA LLC is a single-member LLC with the sole member being my Self-Directed IRA ("XYZ Trust, custodian FBO John Q. Me IRA"). I, John Q. Me, am the Manager of the SDIRA LLC but I am not a member.

Here's where I got lost: I needed to get an EIN from the IRS so I can open the SDIRA LLC bank account. The IRS online Form SS-4 application is confusing. I finally ended up just doing what I thought was best and filled it out as a single-member LLC with the single member being XYZ Trust (on Line 7a) and I used XYZ Trust's EIN (on Line 7b).

Did I do that correctly?

I had to do this in a hurry because I am buying a rental property in the name of the SDIRA LLC and I needed to get everything set up now in order to do the Agreement of Sale for the seller to sign (it's a private deal -- no realtors are involved). I definitely am looking to find a CPA in my area who knows about self-directed IRA's and self-directed IRA LLC's, how they are handled taxwise, and can help me set everything up in QuickBooks for the rental property, etc. (I am in Camden County, New Jersey in case anyone knows a CPA they could suggest). Until I get the real help that I need with this, I am trying a little more information about how the SDIRA LLC taxes will be handled, etc.

As a single-member LLC, the SDIRA LLC is apparently considered to be a disregarded entity. But, can the SDIRA LLC prepare an informational tax return showing income, expenses, profits, losses, etc. If so, is it a return that is done solely with the EIN that the IRS issued to the SDIRA LLC?

And, what happens if the SDIRA LLC has unrelated business income and has to pay taxes? Does the SDIRA LLC file a tax return and pay the taxes directly to the IRS?

I know this is a lot to ask about. And, yes, I will be getting a professional to help me. But any feedback in the meantime would be appreciated.

Thanks.

Reply to
BETA-32
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Hi Beta-32, Did you ever get any reply on this?

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Reply to
oschreiber

Hi Beta-32, Did you ever get any reply on this?

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Reply to
oschreiber

I don't think I ever did receive a reply. I wasn't really expecting one since it is an unusual type of situation, etc. But, I thought I would post it anyway. I did eventually figure it out on my own, but it was long enough ago that I am not sure how I did that.

More recently, I posted the part of the question again (probably under another name) about how I was trying to find an accountant in my area who knows about Self-Directed IRA's, SDIRA-LLC's, etc. I haven't found one yet and I am still looking. I'm in Canden County, New Jersey (USA).

Are you do> Hi Beta-32,

Reply to
Beta-32

speed_phw had written this in response to

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Speed PHW

------------------------------------- BETA-32 wrote:

You did it correctly. But you do not have to file tax for the LLC as LLC is a pass through (disgarded entity). All profit/loss are passed to the owner in this case the IRA account. I setup my own self directed IRA about 3 years ago and invested in a single family home (currently on lease option) and Made 5 short term loans.

I'm currently setting up one for my wife. But now the custodian wants a self-directed IRA sepcific LLC operating agreement. This was not the case three years ago. Are you willing to share where you found the sample LLC agreemnet for self-directed IRA? I would be willing to share all my docs as well. I'm looking for someone to bounce ideas. Thanks.

PHW

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Reply to
speed_phw

I morphed my posting ID since I lasted posted on this topic.

What State are you in? I am in NJ. I still have not found a New Jersey accountant to use who knows about Self-Directed IRA's, Self-Directed IRA LLC's, and real estate investments in the name of the Self-Directed IRA LLC.

I did my own formation documents etc. and I am trying to remember exactly where I found them. I bought one or maybe two low-cost sample Self-Directed IRA and Self-Directed IRA LLC sample document packages online. I bought one through Ebay, recevived it, thought it was worthwhile, and later received a message from Ebay that they were no longer permitting that advertiser on Ebay -- I am not sure why. I'll try to do a little more digging to see if I can find where I got the other sample documents, and I'll post that if I can find it.

I know that the documents I ended up using were my own hybrid creation which came from general information I learned about the topic, information I purchased when viewing and purchasing sample documents, etc. It was a lot of work and I don't recommend that most people try to do this on their own.

I th> speed_phw had written this in response to

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Reply to
BetaB4

Here is one place that I got information and sample documents:

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For me, it was well worth the price.

There was a m> I morphed my posting ID since I lasted posted on this topic.

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Reply to
BetaB4

len811 had written this in response to

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: NAFEP (NAFEP.com) offers self-directed IRA connected with trust; does not require LLC.

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Reply to
len811

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