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Articles about IRAs, Roth IRAs, self-directed iras and IRA LLCs.

How to Hire IRA LLC Attorney Richard Keyt to Form an IRA LLC

In forming Arizona limited liability companies, including LLCs owned by an IRA or a retirement plan IRA LLC attorney Richard Keyt has learned how to make the IRA LLC formation process very easy.  Here’s the 6 easy steps the IRA owner must accomplish to hire Richard to form an IRA LLC for and get check book control over the IRA’s funds:

Step 1.  Research:  Spend some time on this website and learn about IRA LLCs.

Step 2.  Get Answers to Your IRA LLC Questions:  Contact me, IRA LLC attorney and tax lawyer Richard Keyt, at 480-664-7478 or [email protected] if you have any questions about forming or operating an IRA LLC.  I don’t charge to answer questions about IRA LLCs.

Step 3.  Move the Funds to a Custodian that Allows Directed-Investments:  If you cannot make self-directed investments where your funds are currently located, you must open an account with a custodian that will allow for the self-directed investments.  See “Custodians” that my clients have used for their IRA LLCs.  […]

How to Hire IRA LLC Attorney Richard Keyt to Form an IRA LLC2024-03-08T07:31:55-07:00

Are self-directed IRAs too good to be true?

USA Today:  “A self-directed IRA allows you to invest in things other than securities registered with state or federal authorities. For example, you can use the assets in a self-directed IRA to buy a rental property, or even as the down payment for a mortgage on a rental property.  There are restrictions, however, on self-dealing: You can’t rent the place to yourself, for example. And you must have a qualified third-party custodian for the IRA.  Self-dealing restrictions on investing in small businesses — especially sole proprietorships — are also complex, and you should see a tax lawyer before you put IRA money into a small business. ‘Self-directed IRAs have helped fund thousands of small businesses that otherwise wouldn’t be there, says Tom Anderson, president of the Retirement Industry Trust Association, a trade group.”

Are self-directed IRAs too good to be true?2017-09-10T16:32:19-07:00

The Self Directed IRA – The Basics all Estate Planners Should Know

Warren Baker’s post on the WealthCounsel blog states: “Let’s assume for a moment that your client’s goal is to invest into a piece of residential rental real estate. Your client can either:  (1) request that the new custodian purchase the property directly on behalf of the IRA; or (2) direct the custodian to first invest the IRA into a Limited Liability Company (“LLC”) that is thereafter 100% owned by the IRA and purchase the property using the LL (note: your client will act as the Manager of this LLC).  The latter option gives your client the flexibility to purchase the property using a check from the LLC’s checking account, which depending on the custodian’s ability to move quickly, will be quicker than option number one.”

The Self Directed IRA – The Basics all Estate Planners Should Know2018-05-13T13:58:52-07:00

Can My IRA Invest in Any Type of Asset?

Question:  Can I cause my self-directed IRA to invest in any type of asset I desire?

Answer:  No.  Section 408(a)(3) of the Internal Revenue Code says that an IRA may not invest in life insurance contracts (life insurance).  The IRS also restriction investments in “collectibles.”  Here is what IRS Publication 590 says about IRAs investing in collectibles:

“If your traditional IRA invests in collectibles, the amount invested is considered distributed to you in the year invested. You may have to pay the 10% additional tax on early distributions, discussed later.

Collectibles.  These include:

  • Artworks,
  • Rugs,
  • Antiques,
  • Metals,
  • Gems,
  • Stamps,
  • Coins,
  • Alcoholic beverages, and
  • Certain other tangible personal property.

Exception.  Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department. It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion.”

Can My IRA Invest in Any Type of Asset?2018-05-13T13:58:52-07:00

The Individual 401(k)

The following article was posted by Ryan Rippy, the Business Development Manager of The Entrust Group.

Save more with an Individual 401(k) plan and expand your investment options with a self-directed account.  An Entrust self-directed Individual (k) Retirement Account gives you the maximum flexibility and financial ability in investing for your future. The Individual (k) is similar to a 401(k) but for businesses that employ only the owners, their spouses, and partners.

An Individual (k) plan has two components based on your employer and employee roles:

  • (Employee) Salary deferral, based on earned income, up to the allowed limit
  • (Employer) Profit-sharing contribution, maximum 25% of compensation, up to the allowed limit

With Entrust, you can establish the salary deferral component as either a Roth or traditional tax-deferred plan, which reduces your taxes now and offers tax-deferred savings. With the Roth, you make after-tax contributions to the account, and like a Roth IRA, future withdrawals are tax free.

If you currently have an Individual (k) and want to self-direct your funds into nontraditional investments, you can transfer or rollover the funds to Entrust without penalty.

Consider an Individual (k) retirement account if:

  • You are a sole […]
The Individual 401(k)2018-05-13T13:58:52-07:00

In Pictures: 12 Tips For IRA And 401(k) Heirs

Forbes:  “An inherited retirement account is more than a simple pot of cash. Often, an heir can stretch out withdrawals from an individual retirement account over his or her life expectancy, gaining decades of tax-deferred or (in the case of a Roth IRA) tax-free investment growth. But the IRS rules for doing this can be tricky. If you’re inheriting an IRA or 401(k), here’s what you need to know.”

In Pictures: 12 Tips For IRA And 401(k) Heirs2018-05-13T13:58:53-07:00

Articles on Converting to a Roth IRA

Here are a number of articles that I found on the net that discuss the pros and cons of converting a traditional IRA to a Roth IRA.

  • April 4, 2010.  “The Debate Goes On: To Roth or Not to Roth?” – InvestmentNews:  “For the superwealthy, conversion is a slam-dunk; others should be more careful.  The following is an edited transcript of an InvestmentNews.com webcast held in New York on March 9.  . . . To listen to the archive of the webcast, visit Investmentnews.com/rothtranscript and click ‘View archive’.”  One of the panelists was Ed Slott, the renowned IRA expert.
  • March 21, 2010.  “Many Wealthy Investors Reluctant to Do Roth IRA Conversions” – InvestmentNews:  “Many are ideal candidates, but they also face biggest tax bills.  Mutual fund companies are reporting a brisk business in Roth IRA conversions as a result of a change in the tax law, but there is one segment of the public that is decidedly cool to the idea, even though their financial advisers are urging them to take the plunge.  Wealth advisers said that a lot of their clients, many of whom would benefit […]
Articles on Converting to a Roth IRA2018-05-13T13:58:53-07:00

Investors Tap Into 401(k) Money Tax-Free for Business Startups

From the using your IRA or retirement account to self-direct investments department. An article in Investment News states, “Hal Mottet, a Lake Oswego, Oregon, businessman bought a family-owned packaging company for $3.5 million in late 2007, and he and a partner financed 40 percent of the sales price with their retirement money. Mottet and his partner used a loophole in U.S. tax law to roll over $1.4 million from their existing 401(k) retirement plans to finance the purchase of Carson, California-based Empire Container Corp. . . . Here’s how it typically works: An investor sets up a corporation, establishes a new 401(k) plan there, rolls over his or her existing 401(k) or Individual Retirement Account, and then uses part or all of the plan’s assets to buy shares of the new company. This funds the new business, while keeping the tax- advantages of the retirement plan.”

Investors Tap Into 401(k) Money Tax-Free for Business Startups2018-05-13T13:58:53-07:00

Five Rules for Inherited IRAs

We create IRAs and retirement plans to provide income during our retirement years, but we also expect that on our deaths our loved ones will inherit a sizable sum of money from the IRA or the retirement plan. Everyone knows or should know that the proper way to transfer IRA and retirement plan assets on the death of the IRA owner or plan participant is by a beneficiary designation.

I believe that IRA owners and retirement plan participants should do more than simply complete a beneficiary designation form.  They should also educate their adult beneficiaries about fundamental IRA concepts to prevent them from immediately cash out the inherited IRA or plan and blow the money on an expensive car or other foolish expenditures.

Forbes has a great article called “Five Rules For Inherited IRAs” that is a must read article for anybody whose IRA or retirement plan may leave substantial assets to loved ones.  The article begins:

“Before they inherited $3 million in retirement accounts from their father last year, the three middle-aged siblings didn’t know it was possible for heirs to stretch out the tax benefits of such accounts for decades. […]

Five Rules for Inherited IRAs2017-09-10T15:47:30-07:00

Stepping Outside the Real Estate “Box” with Self Directed Retirement Accounts

Laurie Bachelder, Principal of  NUA Advisors, LLC, writes:  “Investors tired of watching their retirement accounts ride the Wall St. rollercoaster are searching for other ways to create wealth in their retirement accounts. If you turn to most business or financial publications or websites you will find many articles about investing in real estate with a Self Directed Retirement Account (‘SDRA’).  The majority of articles written about investing with a SDRA pertain to real estate as a popular choice for an alternative investment, and why wouldn’t it be.  Real estate offers several advantages.”

Stepping Outside the Real Estate “Box” with Self Directed Retirement Accounts2017-09-10T15:49:30-07:00

The Essentials of Self-directing Retirement Accounts

Ann Siford, Manager of Professional Network at Equity Trust Company writes:  “A self-directed IRA allows investors to directly manage their retirement portfolio, diversifying beyond the traditional mutual funds, stocks and bonds to include assets such as real estate, promissory notes, tax liens, private placements and oil/gas.”

The Essentials of Self-directing Retirement Accounts2017-09-10T15:58:44-07:00

The Hidden Dangers in IRAs

Wall St. Journal:  “Is there a Ponzi scheme lurking in your IRA?  That may sound like a bizarre question. But in recent years, a number of well-off professionals and their families have been ensnared in frauds that prey on individual retirement accounts, according to securities lawyers and firms that manage these accounts.  The vehicle typically targeted by such schemes is a self-directed IRA . . . .”

The Hidden Dangers in IRAs2017-09-10T15:57:30-07:00

Rothify Your 401(k)

Forbes:  “Got an ex-employer retirement account sitting around? You can convert it–and maybe your current 401(k), too–into a Roth IRA.  Are you one of the 15 million Americans who has a 401(k) left behind with an ex-employer? Alternatively: Does your current company allow you to make “in-service” rollovers from its 401(k) to an individual retirement account? (Most employers do allow such rollovers for workers 59.5 or older, and a minority allow them for younger workers.)  Either way, you may have a tax-saving option you haven’t heard about: converting an old 401(k) or part of a current one into a Roth IRA.”

Rothify Your 401(k)2017-09-10T15:55:51-07:00

Roth Conversion Shenanigans

Forbes:  “Sure it might make sense to take the tax hit now and get into a Roth IRA, but don’t blindly trust what your broker suggests.  Much has been written about Roth conversion opportunities in 2010. It seems every product manufacturer and annuity pitchman in the country is recommending some variation of a Roth conversion strategy. Many such schemes, which masquerade as advice, are but hollow mockeries designed to line the pockets of product manufacturers, their salesmen, and the U.S. Treasury. Legitimate Roth conversion strategies do exist, but they are the exception rather than the rule.”

Roth Conversion Shenanigans2017-09-10T15:55:21-07:00

You Inherited An IRA. Can Creditors Grab It?

Forbes:  “More Americans will be handing down IRAs to their kids. A new decision suggests it might be a creditor proof inheritance.  But nothing is certain yet.   In what estate planners and bankruptcy lawyers are saying could be a significant case, a federal bankruptcy judge in Minnesota has allowed a bankrupt woman to keep a $63,000 individual retirement account inherited from her father.  IRAs inherited from someone other than your spouse have traditionally not been protected in bankruptcy under either federal or state laws, and thus have been available for creditors to grab.”

The case is In re Nessa, a federal bankruptcy case out of Minnesota.

You Inherited An IRA. Can Creditors Grab It?2019-03-17T14:14:14-07:00

Five Reasons Not To Convert To A Roth IRA

Forbes:  “Will your tax rate be lower in retirement? Do you plan to spend all your savings? Think twice about a conversion.  In recent months, you’ve probably heard a lot about the benefits of converting traditional pre-tax individual retirement accounts into Roth IRAs. But here’s something you may not have heard: Many taxpayers should run, not walk, from a Roth conversion.”

Five Reasons Not To Convert To A Roth IRA2018-05-13T13:58:55-07:00

The Dog Ate My IRA Rollover

Forbes:  “If you miss the 60-day rollover deadline, will the IRS be sympathetic?  You can move wealth from a company pension plan, a 401(k) or traditional Individual Retirement Account into a traditional IRA without owing any taxes in what’s known as a ‘rollover.’ . . . a surprising number of taxpayers make mistakes when doing a simple rollover and end up either paying taxes prematurely or paying an expert like me to help them clear up the mess.”

This article was written by Robert S. Keebler, CPA, MST, AEP (Distinguished) is a partner with Baker Tilly Virchow Krause, LLP and chair of the Baker Tilly Financial and Estate Planning Group. He is the author of The Rebirth of Roth, A CPA’s Ultimate Guide for Client Care. Mr. Keebler was named by CPA Magazine as one of the Top 100 Most Influential Practitioners in the United States and one of the Top 40 Tax Advisors to Know During a Recession.

I known that Mr. Keebler is one of the leading experts in the area of IRA law because of his close relationship with WealthCounsel, a fabulous company that produces the best […]

The Dog Ate My IRA Rollover2018-05-13T13:58:55-07:00

The Roth Conversion Question

Forbes:  “Come Jan. 1 anyone can convert a traditional IRA into a Roth IRA. Not everyone should. Here’s help deciding if the strategy fits you.  Next year all taxpayers will be allowed to convert their traditional individual retirement accounts into Roth IRAs, . . . Conversions are complicated and make sense only for certain taxpayers. Even those who might reap big benefits from converting have to overcome a natural aversion to paying taxes sooner than needed.”

The Roth Conversion Question2017-09-10T16:04:58-07:00

Savvy Buyers Use Self-directed IRA to Buy Homes

San Francisco Chronicle:  “With many properties at bargain-basement prices, more people have been turning to their self-directed IRAs as a ready source of capital to make real estate investments. Companies that manage self-directed IRAs say real estate investments by their clients are up as much as 30 percent over the past year. . . . Self-directed IRAs account for just 2 percent of the $4.2 trillion IRA market, but are among its fastest- growing segments. They allow access to a variety of investment vehicles beyond just stocks and bonds. The IRS closely regulates them, and any real estate investments must be handled by IRA custodian firms that hold the property inside the IRA.”

Savvy Buyers Use Self-directed IRA to Buy Homes2018-05-13T13:58:56-07:00

Kinky IRAs

Forbes:  “Church bonds. Mexican land. Pay telephones. Swiss annuities. Bus shelters. Gold coins. Paintings. Mortgages. Untraded stock. Bull sperm.  Bet you don’t know which five of these ten assets are permissible investments in Individual Retirement Accounts. . . . If you’re interested in unconventional assets, it’s worth boning up on the rules, because most lawyers and IRA custodians have only partial knowledge.”

See the table of custodians that allows self directed IRA investments.

Kinky IRAs2018-05-13T13:58:56-07:00

Self-Directed IRA a Good Bet?

CNBC:  “If you recently watched your individual retirement account or 401(k) drop by double digits, you may wonder if there is a better way to sock away money in an uncertain economy.  What if you could replace some of your investments with tax-deferred holdings not tied to the troubles on Wall Street? Maybe you’d prefer to invest in cattle in Wyoming, a gas station in Philadelphia or an underwater cemetery in Miami.”

Self-Directed IRA a Good Bet?2017-09-10T16:28:06-07:00

What is the Plan Asset Rule?

All IRA owners who have made self-directed investments into an IRA LLC and anybody considering do so should read Jeff Nabers’ article called “What is the Plan Asset Rule?”  This rule turns assets owned by an entity into assets that are deemed to be assets of the IRA with the consequence that any transaction between a disqualified person and the entity is a prohibited transaction.

“The plan asset rule, among other things, is used to determine whether or not a retirement plan is involved in a prohibited transaction.”

See my post called “Department of Labor Regulation 29 CFR 2510.3-101 – the Plan Asset Rules.”

What is the Plan Asset Rule?2018-05-13T13:58:56-07:00

When Can an IRA Invest in a Business Partly Owned the IRA Owner the IRA Owner’s Family?

Texas attorney Noel C. Ice wrote a very detailed law review type article called “Under What Circumstances Can an IRA Invest in a Business Owned in Part by the IRA Owner and Members of The IRA Owner’s Family?”  If you want to get into the nuts and bolts of the law, this article is for you.  Here’s some text from the introduction:

“Can an IRA form or invest in a partnership (or other entity) in which the IRA and other disqualified persons have more than a 50% interest in capital or profits without violating the prohibited transaction rules? Maybe, if Swanson [1] is followed.”

“Can an IRA form or invest in a partnership (or other entity) in which the IRA and other disqualified persons have less than a 50% interest in capital or profits prior to formation, but who have more than a 50% interest in capital or profits after formation, without violating the prohibited transaction rules? Theoretically yes, according to PWBOpL 2000-10A and FSA 200128011.”

“Can an IRA form or invest in a partnership (or other entity) in which the IRA and other disqualified persons have less than a 50% interest in capital or profits without violating the prohibited […]

When Can an IRA Invest in a Business Partly Owned the IRA Owner the IRA Owner’s Family?2018-09-28T09:54:59-07:00
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