What are the Tax Requirements for a Self-Directed IRA LLC?

April 25th, 2012

What tax forms do I need to file for my Self-Directed IRA LLC?
Let’s step back to understand some basic concepts:
First, your LLC is owned by your IRA.
Second, IRAs are not subject to federal taxes.
Third, there is a difference between a single-member LLC and a multi-member LLC.
A single-member LLC is an LLC holding one set of IRA funds, meaning the LLC only contains funds from one IRA. A single-member LLC can have a co-manager, as long as the co-manager is not contributing IRA funds into the LLC.
A multi-member LLC is defined as an LLC that (a) has more than one person (e.g., a husband and a wife) contributing IRA funds to the LLC, or (b) has more than one type of IRA funds in the LLC. For example, an LLC with one person contributing both Traditional and Roth IRA funds would be considered multi-member.
Okay so what about filing tax returns?
You do not need to file any tax forms with the IRS if your LLC is a single-member LLC.
The IRS requires an annual valuation of the LLC and its assets. Your passive custodian will send you the valuation form (Form 5498) to complete and will file it with the IRS on your behalf. This is how the IRS keeps record of your IRA LLC, its value and holdings.
With a multi-member LLC, you are required to file Form 1065 with the IRS.
To learn more about the advantages of using a Self-Directed IRA with checkbook control please contact an IRA expert at 800-472-0646 or visit www.irafinancialgroup.com