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

Discussion in 'Accounting' started by BETA-32, Jan 24, 2008.

  1. BETA-32

    BETA-32 Guest

    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

    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

    BETA-32, Jan 24, 2008
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  2. BETA-32

    oschreiber Guest

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

    BETA-32 wrote:

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    oschreiber, Dec 1, 2008
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  3. BETA-32

    oschreiber Guest

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

    BETA-32 wrote:

    Newsgroup Access Courtesy
    Tax and Accounting Software Forum
    Web and RSS access to your favorite newsgroup -
    alt.accounting - 2152 messages and counting
    oschreiber, Dec 1, 2008
  4. BETA-32

    Beta-32 Guest

    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 doing something similar? Is that why you were asking if I received
    any response?
    Beta-32, Dec 12, 2008
  5. BETA-32

    speed_phw Guest

    speed_phw had written this in response to

    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.


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    speed_phw, Mar 25, 2009
  6. BETA-32

    BetaB4 Guest

    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 think I can find the Self-Directed IRA LLC Operating Agreement that I
    eventually put together and used, and also the Subscription Agreement that I
    put together and used when getting my custodian to purchase units in the
    Self-Directed IRA LLC that I set up. I don't know how good they are or if
    they are fully correct. I don't want to post them here, but if I could
    figure out a way to send them to you, I may be able to block out the names
    etc. and forward a sample of what I did.
    BetaB4, Mar 26, 2009
  7. BETA-32

    BetaB4 Guest

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

    For me, it was well worth the price.

    There was a minor glitch or confusion in the ordering process when I
    oredered it over a year ago. I was supposed to tell them the name of the
    State where I was going to form my IRA LLC, but I don't think they asked for
    that anywhere in the ordering process. So, after a few days, I received an
    email from them telling me that I need to specify the State. That delayed
    my order by a few days which was a disappointment. But the CD did arrive a
    few days after that. Maybe they fixed that in the ordering process since
    then. I did send them an email letting them know about the glitch in the
    ordering process. If they didn't fix that, I guess the alternative would be
    to place the order and then send a separate email telling them the State
    where the IRA LLC will be formed.
    BetaB4, Mar 26, 2009
  8. BETA-32

    mitch Guest

    I went to this website but they are now under construction. I think I
    understand the process to set this up but I'm looking for sample
    Operating Agreements. Would you be willing to sell or share the
    templates you have for the operating agreements. YOu can respond
    directly . Thanks
    mitch, May 8, 2009
  9. BETA-32

    mitch Guest

    is a website that doesn't exist any longer. I went there about 3
    weeks ago and the website was up but it would not allow me to purchase
    their software. This week the website doesn't even exist. please
    email me directly,
    mitch, Jun 5, 2009
  10. BETA-32

    len811 Guest

    len811 had written this in response to
    NAFEP ( offers self-directed IRA connected with trust; does not
    require LLC.

    Newsgroup Access Courtesy
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    len811, Nov 21, 2009
  11. BETA-32


    Jan 6, 2011
    Likes Received:
    IRA LLC operating agreement

    Hi , Thank you for the opportunity to post here and connect with the beautiful and helpful people here. I recently just got some knowledge about Self Directed IRA so I am really excited about it. I have little money so I cant afford to pay for LLC cost. I would be thankful if anyone can help by providing me a boiler plate copy that I can use? I just need the languages required by IRS. If you have the multimember the better as I have to put money together with a few people to afford any investments.
    I really appreciate any help by those who are familiar with this paperwork (IRA or Roth IRA LLC operating agreement requirement. I am also aware I need to revise this specific to my business.

    chrisvictoria09, Jan 6, 2011
  12. BETA-32


    Feb 3, 2011
    Likes Received:
    Tax Filing for SD IRA owned LLC

    If your IRA owns a Single Member LLC, then the manager usually does not have to file a Federal Tax Return for the entity. If fact if they do, it will probably result in a letter telling them not to. Earnings for the entity are generally passed through to the owner of the LLC and are reportable through to the owner’s return.

    In the case of an IRA owner, most people think the IRA is tax exempt, so nothing needs to be done. THAT IS NOT THE CASE!!!

    Commonly referred to as Checkbook IRAs or IRA-LLC’s, even without a formal Federal tax return requirement, the manager of the IRA owned entity still needs to provide the owner with details about what transactions are passing through. Depending on the type of income and/or losses passed through, the IRA itself may need to file a tax return. If it does then the IRA will have to get its own tax return.

    Items such as net operating income, profits from debt financed investments, and rental income from personal property will potentially result in the IRA having a tax filing obligation. Even when there is not a tax due, it can be beneficial to file to claim tax losses for the year.

    Check with the manager of your IRA owned entity to make sure they are reporting all the info needed to determine if the IRA has a filing requirement. Then make sure your have the appropriate tax filing prepared for your IRA.

    Note also, that even though the LLC may not have a federal filing requirement, State laws may require annual reporting for by the entity itself.
    bhumphreycpa, Feb 3, 2011
  13. BETA-32


    Feb 11, 2014
    Likes Received:
    Just wondering

    Where did you obtain the language for your operating agreement? Was your references online? If so, where?
    MrHarrisThomas, Feb 11, 2014
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