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Self Directed Roth IRA LLC owns duplex, rent one side from LLC?

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    Self Directed Roth IRA LLC owns duplex, rent one side from LLC?

    I'm considering the possibility of setting up a Self Directed Roth IRA LLC and purchasing a duplex in the name of the duplex. If I do this, I'd like to live in one of the units. I would of course pay FMV rent to the LLC -- the unit I want to live in is currently rented for $500/mo and I would pay that amount from my personal account to the LLC monthly.

    But I'm wondering if this would be legal. I understand that if the SDIRA owned the property directly, I would be considered a "Prohibited Person" but since the LLC would own it, I'm not sure.
    Don
    Filed Pro Se on 8/4/11 (No Asset, Chapter 7)
    Redeemed Automobile ProSe (722 Redemption),Discharged on 11/3/11

    #2
    I don't think that will work: http://www.keytlaw.com/irallc/2013/0...ected-ira-llc/

    I know very little about self directed IRAs and had never heard of a self directed Roth IRA before your post, so this is based only on a little internet research inspired by your post. If I understand, you want the LLC that is 100% owned by your self-directed IRA to purchase the duplex. Adding the additional layer of ownership does not keep you from being a disqualified person.

    I am pretty sure that if somebody who is not a disqualified person owned more than 50% of the LLC or the building, you could rent a unit in the duplex. But, I suggest you consult with a tax attorney with experience in this specific area before doing that.
    Last edited by LadyInTheRed; 04-17-2016, 01:47 PM.
    LadyInTheRed is in the black!
    Filed Chap 13 April 2010. Discharged May 2015.
    $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

    Comment


      #3
      Originally posted by LadyInTheRed View Post
      I don't think that will work: http://www.keytlaw.com/irallc/2013/0...ected-ira-llc/

      I know very little about self directed IRAs and had never heard of a self directed Roth IRA before your post, so this is based only on a little internet research inspired by your post. If I understand, you want the LLC that is 100% owned by your self-directed IRA to purchase the duplex. Adding the additional layer of ownership does not keep you from being a disqualified person.

      I am pretty sure that if somebody who is not a disqualified person owned more than 50% of the LLC or the building, you could rent a unit in the duplex. But, I suggest you consult with a tax attorney with experience in this specific area before doing that.
      Thanks LITR. I've spent much of the afternoon researching this further and was quickly coming to the same conclusion.
      Don
      Filed Pro Se on 8/4/11 (No Asset, Chapter 7)
      Redeemed Automobile ProSe (722 Redemption),Discharged on 11/3/11

      Comment

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