Accounting and Self-Directed IRA LLC


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Does anyone here have a Self-Directed IRA LLC (a.k.a. "checkbook IRA") set
up that they use for some of their investments -- including buying real
estate?



I have one. This Self-Directed IRA LLC (SDIRA-LLC) is a single member LLC
in which 100% of the shares of the LLC are owned by my self-directed IRA
that I set up earlier at Sunwest Trust. Those LLC shares are assets of my
IRA, not my assets. I am located in New Jersey, and the SDIRA-LLC is set up
in New Jersey.



I have a specific question about how the SDIRA-LLC is handled in terms of
reporting and filing tax returns. Here's how I "think" it may work, but I
don't know for sure:



Since all of the shares of the SDIRA-LLC are owned by and held in my IRA
(and not owned by or held by me), I am thinking that any profit or loss on
the SDIRA-LLC does not get reported on my tax returns. In fact, I think
that nothing about the SDIRA-LLC would appear on my tax returns. Instead,
the SDIRA-LLC needs to have its own separate bookkeeping and accounting
done, and the end-of-year asset value (and maybe profit and loss) get
provided to the IRA custodian (Sunwest Trust).



Is this correct?



Obviously, I need to arrange for an accountant to help me with all of this
self-directed IRA and SDIRA-LLC stuff as well as all of my tax, accounting,
and QuickBooks setup needs. I am in the process of doing that right now.
But, in the meantime, if anyone knows and can provide the answer to the
above question about how SDIRA-LLC's are reported for tax purposes, I would
appreciate it.



Thanks.
 
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Ira llc

The assets in the Single Member LLC are owned by the IRA not you. There is no Federal tax reporting for the entity as it is a disregarded entity. HOWEVER: There may need to be a 990-T filed for the IRA itself. You as the owner of the Self Directed account will need to take care of getting that done.

Some of the earnings (or losses) from the LLC's activity will need to be reported, and maybe taxed to the IRA.

Be careful about the prohibition of providing goods and services to the IRA owned asset. It would be deemed to be a prohibited transaction and disqualify the IRA. The definition of what is "providing services" is vague, but it could be almost anything including accounting services, using your personal assets to manage the company, (ie computer systems, software, other office equipment).

There may also need to be state reporting and possibly state tax filing. Depending on the state.
 
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I'm looking for Private Lenders (Use your self directed IRA)

Will pay 20% interest for private funding. Elvin 973-336-9524
 

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