HI, I’m new and joined as this thread came up in my google searches relative to this topic. I thought I would share what I have been told. I am hopeful that others might chime in with what they’ve learned since this thread was last active.
Background: I am in the process of setting up a self-directed (traditional, not Roth) IRA funded by rollover funds from a 401K with a former employer. What I have learned through speaking with a US tax attorney & CPA as well as a PT attorney for the investment group handling the development project I’ve identified which is ownership in a hotel project. 1. A limited purpose LLC must be created to act as owner of the rollover funds. The LLC is created and then the checking account and named ‘xyz bank FBO acct holder.’ 2. If you have another LLC - say a side hustle or what have you, it is not recommended that LLC is used to own the self-directed IRA (as per lawyer/CPA, IRA company said differently). 3. If funds are not going direct to the investment but need to go through a PT bank, then the PT bank account MUST be in the name of the US -based, limited purpose LLC to avoid IRS penalty. 3. I’m being told on the PT side that a PT LLC would need be created and a checking account opened in that LLC’s name -the name of the US LLC and the PT LLC must be the same and the PT LLC must be solely owned by the US LLC. 4. I’m warned that I’d be creating an offshore entity and that I will require an accountant to file my taxes going forward as my taxes would be very complex. 5. I’d have to pay LLC fees in both the US and PT for creation and maintenance. 6. LLCs must remain ‘in business’ to receive any interest and/or buy back. 7. I need degrees in finance, accounting, tax law, and international law (sarcasm) to navigate this confidently. ** Your mileage may vary. ** I truly hope someone will have some better, less complicated solution and post same. (Note D7 is not currently an option for me as I would be unable to fulfill the time-in-country requirement and GV is only possible if I utilize the funds from my 401K.) - Margaret
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