Self-Directed IRA In-House CPA Service

IRA Financial Group is the only full service Self-Directed IRA facilitator that offers its clients the ability to consult with our in-house tax accountants and CPAs, in addition, to our tax professions. Our in-house CPAs are specially trained in the taxation of retirement accounts, which allows us to provide our clients with specialized tax advice and offer tax filing and reporting services relating to the use and taxation of retirement funds to make investments. Because the use of retirement funds to make investments, such as real estate via a Self-Directed IRA LLC are governed by a set of multifaceted and not widely known tax rules, having the ability to consult and work directly with specially trained tax professionals and CPAs is crucial.

The Taxation of a Self-Directed IRA LLC

Self-Directed IRA LLC owned by one IRA – Disregarded Entity

Using a Self-Directed IRA LLC to make investments, such as real estate presents many exciting investment and tax deferral opportunities. In general, when a wholly owned IRA LLC, also known as a single member Self-Directed IRA LLC is used to make a retirement account investment, there is generally no Federal Income tax return filing requirements, as the LLC will be treated as a disregarded entity for tax purposes. An LLC is treated as passthrough entity for tax purposes, which means it is not subject to tax. The owner (IRA member) of the LLC would be the party responsible for the payment of tax on the allocated net profits generated by the LLC.

When it comes to the payment of tax, in the case of a single member LLC treated as a disregarded entity for tax purposes, the member (owner) of the LLC, and not the LLC would be responsible for the payment of tax in connection with any net profits generated by the LLC. However, in the case of a single-member Self-Directed IRA LLC, an IRA, which is exempt from tax pursuant to IRC Section 408, is the sole owner of the LLC, not an individual or taxable entity. Hence, since a tax-exempt retirement account is the sole owner of the LLC, in general, no tax is due when making real estate and other passive investments with a Self-Directed IRA LLC.

In addition, most states do not require single member LLC to file a state tax return. However, certain some states do impose certain filing and tax requirements on single-member Self-Directed IRA LLCs. As a result, it is vital to work with specially trained tax professionals and CPAs who can properly advise on all the federal and state tax matters involving using a single-member Self-Directed IRA LLC.

Self-Directed IRA LLC owned by two or more IRAs - Partnership

In the case of an LLC owned by two or more IRA accounts, the LLC would be treated as a partnership for Federal Income tax purposes and as a result an IRS Form 1065, Partnership Return, must be filed with the IRS even though no tax is due at the partnership level. An LLC owned by two or more IRAs is treated as a partnership for tax purposes. Like a single member LLC, multiple-member LLCs are treated as passthrough entities for tax purposes and, thus, are not subject to tax. The owner(s) (IRA member(s)) of the LLC would be the parties responsible for the payment of tax on the allocated net profits generated by the LLC. However, in the case of a multiple-member Self-Directed IRA LLC, two or more IRAs, which are exempt from tax pursuant to IRC Section 408, would be the owners of the LLC, not an individual or taxable entity. Hence, since a tax-exempt retirement account are the sole owners of the LLC, in general, no tax is due when making real estate and other passive investments with a Self-Directed IRA LLC.

In addition, most states require LLCs treated as a partnership for federal income tax purposes to file a partnership return for state purposes. However, in the case of a single member Self-Directed IRA LLC, an IRA, which is exempt from tax pursuant to IRC Section 408 is the sole owner of the LLC, not an individual or taxable entity. Hence, since a tax-exempt retirement account is the sole owner of the LLC, in general, no tax is due when making real estate and other passive investments with a Self-Directed IRA LLC.

However, some states do impose certain filing and tax requirements on multi-member Self-Directed IRA LLCs. As a result, it is vital to work with specialized tax professionals and CPAs who can properly advise you on all the federal and state tax matters involving using a multiple-member Self-Directed IRA LLC.

In-House CPA Services

The IRA Financial Group has designed a specialized Self-Directed IRA LLC CPA service, which will offer clients the ability to consult with specialized Self-Directed IRA LLC trained CPAs on a wide variety of tax matters concerning the Self-Directed IRA. Below is a list of some of the services offered by our in-house CPAs:

Specialized In-House CPA Service for Real Estate Investors

When it comes to engaging in a real estate transaction with a Self-Directed IRA LLC there are a number of important IRS and tax rules that must be followed. For example, IRC Section 4975 prohibits an IRA owner to engage in a transaction that directly or indirectly benefits him/or her or any other “disqualified person”. A “disqualified person” is defined in IRC Section 4975 as the IRA owner and any of his or her lineal descendants, which include parents, children, spouse, daughter-in-laws, and son-in-laws. In addition, a “disqualified person” is not permitted to provide any services or receive any personal benefit from the Self-Directed IRA LLC investment. Therefore, IRA Financial Group has specially designed a CPA tax service program for Self-Directed IRA investors. The specialized CPA service will offer special federal and state tax advice regarding real estate matters as well will cover federal and state tax reporting and filing obligations. Our specially designed Self-Directed IRA real estate CPA service will also offer clients that ability to work with our in-house CPAs to develop an internal accounting system that could keep track of all IRA LLC related expenses and income in order to be in a position to properly value the Self-Directed IRA LLC’s assets. The Self-Directed IRA real estate CPA service is designed to offer a retirement investor with a more detailed accounting of the activities of the Self-Directed IRA LLC.

The tax professionals and CPAs at the IRA Financial Group are committed to making sure your Self-Directed IRA LLC solution remains in full IRS and state compliance from establishment through investment.

For more information on IRA Financial Group’s in-house CPA services, please contact a Self-Directed IRA expert at 800-472-0646.


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