Can You Utilize an LLC to Hold Stock Options in a Self-Directed IRA?

Can You Utilize an LLC to Hold Stock Options in a Self-Directed IRA?

Tax Law
By Anthony Diosdi The growth of 401(k) plans and other defined contribution plans (as opposed to traditional defined pension plans) has generated additional opportunities for employees and retirees to use IRAs. To postpone taxation of the account balance in such a plan, the individual must rollover some or all of the account balance to an IRA or other qualified plan. This has resulted in the growth of “self-directed” IRAs. Since 1974, the IRS has permitted individuals to totally “self-directed” investments made within their IRAs. Self-directed IRAs are held by a trustee or custodian. They permit investment in a broader range of investments than is permitted by traditional IRAs.  Although a self-directed IRA allows individuals to invest in numerous illiquid assets, investments in some assets are prohibited. These include but may…
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No, No, No, No….Prohibited Transactions and Disqualified Persons in Self-Directed IRAs Part II- The Taxation of Self-Directed IRAs

No, No, No, No….Prohibited Transactions and Disqualified Persons in Self-Directed IRAs Part II- The Taxation of Self-Directed IRAs

IRA
By Anthony Diosdi The appeal of investing retirement funds outside of the typical investments has driven a surge in the use of self-directed Individual Retirement Account (“IRA”) investment structures. Investments within self-directed IRAs frequently include real estate, closely held business entities, private loans, and can include any other investment that is not specifically prohibited by federal law. In my last blog, I discussed the legal implications of investing in a self-directed IRA. This blog I will discuss potential tax obligations and filing requirements associated with self-directed IRAs.Most individuals who fund a self-directed IRAs do not realize that funding such a structure may trigger tax obligations and filing requirements. Anyone considering funding a self-directed IRA must understand the term unrelated business taxable income (“UBTI”). If the self-directed IRA earns UBTI, the…
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