Top 10 Self Directed IRA/401k Mistakes - #1 - Making A Personal Guarantee
The IRA account owner is considered a “disqualified person” and cannot provide a personal guarantee of a loan for the IRA. Therefore, when setting up an IRA or IRA-LLC (ICO), you cannot guarantee a...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #2 - Making Contribution To The IRA LLC
The Self Directed IRA owner makes their annual contribution directly into the bank account of the LLC rather than with the custodian of the Self Directed IRA. In this case, you are personally...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #3 - Active Business Investment Is...
Unrelated Business Taxable Income (UBTI) is generated when an Self Directed IRA engages in active business. A business activity would be one in which the business is buying and/or selling goods and...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #4 - No Rules Can Be Violated When...
One of the key tenets of IRAs is there is a specific list of persons and entities which are prohibited from interacting with your IRA. This leads people to believe that if you are not on the "list"...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #5 IRA owner loans money to a third...
Loaning money to an independent, third party is acceptable and the receipt of interest income is generally considered to be passive and therefore not subject to UBTI. However, adding the equity kicker...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #6 Two or more IRA owners agree to...
Interacting with your IRA is considered a prohibited transaction. So, unrelated, self directed IRA owners will attempt to enter into a reciprocal agreement to loan each others self directed IRA money...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #7 IRA owner uses personal assets or...
A self directed IRA owner is clearly allowed to guide and manage the investments of the self directed IRA. The management can be relatively involved and substantial. As an example, the self directed...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #8 Self directed IRA owner thinks a...
UBTI is the tax that levels the playing field for tax exempt entities that invest and compete against businesses that pay taxes. Self directed IRA account owners find unique business or investment...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #9 Self directed IRA owner attempts...
There are cases where the self directed IRA owner is a real estate agent and they want to earn a commission from selling property to their IRA or some other disqualified party's self directed IRA. Such...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #10 Self Directed IRA Owners...
The receipt of rental income is considered to be passive income and therefore not subject to UBTI. However, some self directed IRA owners fall into the trap of thinking that this means that they can...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #1 - Making A Personal Guarantee
The IRA account owner is considered a “disqualified person” and cannot provide a personal guarantee of a loan for the IRA. Therefore, when setting up an IRA or IRA-LLC (ICO), you cannot guarantee a...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #2 - Making Contribution To The IRA LLC
The Self Directed IRA owner makes their annual contribution directly into the bank account of the LLC rather than with the custodian of the Self Directed IRA. In this case, you are personally...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #3 - Active Business Investment Is...
Unrelated Business Taxable Income (UBTI) is generated when an Self Directed IRA engages in active business. A business activity would be one in which the business is buying and/or selling goods and...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #4 - No Rules Can Be Violated When...
One of the key tenets of IRAs is there is a specific list of persons and entities which are prohibited from interacting with your IRA. This leads people to believe that if you are not on the "list"...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #5 IRA owner loans money to a third...
Loaning money to an independent, third party is acceptable and the receipt of interest income is generally considered to be passive and therefore not subject to UBTI. However, adding the equity kicker...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #6 Two or more IRA owners agree to...
Interacting with your IRA is considered a prohibited transaction. So, unrelated, self directed IRA owners will attempt to enter into a reciprocal agreement to loan each others self directed IRA money...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #7 IRA owner uses personal assets or...
A self directed IRA owner is clearly allowed to guide and manage the investments of the self directed IRA. The management can be relatively involved and substantial. As an example, the self directed...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #8 Self directed IRA owner thinks a...
UBTI is the tax that levels the playing field for tax exempt entities that invest and compete against businesses that pay taxes. Self directed IRA account owners find unique business or investment...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #9 Self directed IRA owner attempts...
There are cases where the self directed IRA owner is a real estate agent and they want to earn a commission from selling property to their IRA or some other disqualified party's self directed IRA. Such...
View ArticleTop 10 Self Directed IRA/401k Mistakes - #10 Self Directed IRA Owners...
The receipt of rental income is considered to be passive income and therefore not subject to UBTI. However, some self directed IRA owners fall into the trap of thinking that this means that they can...
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