EP 46 – The Truth About IRA/LLCs: Alive and Well
Attorneys Mat Sorensen and Mark Kohler discuss the IRA LLC (AKA, Checkbook IRA) structure and dispel the myths being promoted by others as a result of the recent tax court case, McNulty v. Commissioner. This case involved an IRA LLC that held precious metals and Mat and Mark explain what the court ruled and what self-directed IRA investors should know.
For Mat’s article and the courts ruling please read his article
Mark: Welcome everybody to this week’s episode of the directed IRA podcast, and we are here with a very important topic. You saw it in the title. We’re going to be telling you the truth and busting some myths that are out there that are driving us crazy.
Mat: Yeah, busting some myths. I was going to say cutting through the BS. Unfortunately, out there, there’s a lot of misinformation going on. And, you know, bless the web and technology. Everybody seems to have a voice, but sometimes people don’t know what the heck they’re talking about.
Mark: Although I thought if you saw it on YouTube, it was true.
Mat: Yeah. Uh-huh. Well, it’s on a website, it’s on a website.
Mark: They have a real website, so it must be true.
Mat: Yeah, yeah. So what we’re talking about is IRA LLCs sometimes called checkbook IRAs. This is a really popular strategy for self-directed investors. Mark and I have worked with thousands of clients, tens of thousands of clients over the years doing these. We’ve researched them. I’ve got two chapters in my book, and there are some people calling it into question because of a recent case. Now why are they calling it into question? Because they want to sell you something else, and we want to cut through the B.S. on that because we’ve been getting lots of questions on it, and we’re just going to cut to the chase and tell you what you need to know.
Mark: Yeah. Thank you, everybody for listening. If you’re a regular consumer of this podcast, you must be self-directing, your IRA, your HSA, your 401K, your SEP, all the above. We’d love to take control of our retirement and invest in what we know best. Now, one of these methods to do that is to create an LLC of which you can be the manager of, and that LLC may have multiple partners. Could be multiple Roth IRAs or regular IRAs. Your grandkids, Coverdell IRA. I mean, all these different accounts can be pooled into an LLC. So that’s the topic. It’s legit, it’s still legit, and we’re going to break down some of those options. Bust the myths here now. Maybe we should start with the case. Mat What’s the catch?
Mat: Yeah, I mean, this is a case of someone who had an IRA LLC structure named this was McNulty. This is Mrs. McNulty. And she had a
Mark: Nick Nolte in 48 hours with with Eddie Murphy, because I love that.
Mat: That’s all I don’t know about. I don’t know that McNulty is an officer Mcnulty or who’s McNulty? Nick Nolte. Oh, Nick Nolte. That’s different than McNulty. Yeah, yeah, yeah. Who could forget Nick Nolte? Ok, thanks for that curveball. Geez.
Mark: Well, all right. This is if I don’t get an 80s movie reference in in every episode, then I’ve blown it. So you did a good job there. You can’t say Nick Nolte and not think of McDougal’s as well.
Mat: Are you going to let me get to the case? You asked the question you wanted to hear about the case.
Mark: All right. Ok.
Mat: We’re just trying to keep this light, but we’re talking about a tax court case. After all, guys, we’ve got to lighten it up a little bit. But this, you know, Donna McNulty, she had a self-directed IRA that ended up establishing an LLC one hundred percent, and that was a very common structure. She was the manager of the LLC. The LLC had a bank account. The IRA invested the money. It was in the LLCs bank account, great, fine, and dandy. Then she goes out and buys precious metals from a precious metals dealer with
Mark: Wait, what’s a precious metal?
Mat: Gold, you know, silver platinum
Mark: Gold finger. I just wanted you to say gold so I could sing gold finger.
Mat: Oh my gosh.
Mark: Ok, now remember that show had Pussy Galore, which is a real name. I don’t. I don’t know what some of you were thinking of, but
Mat: Yeah. That’s a, wait, is that from? That was Goldfinger. Ok.
Mark: Oh yeah, she was the pilot. Hmm. Ok. All right, Nina. Double 07 weekend.
Mat: I’m going to need to catch up on double 07.
Mark: Ok, so precious metal to the case. Everyone. Yeah, gold, silver, whatever.
Mat: Yeah. The American Eagle Gold coins and which again, fine and dandy retirement accounts and IRA LLCs can own those. But she took personal possession of them and stored them at her home. Now this was what the IRS brought the case, they said. Storing precious metals that your IRA or IRA LLC owns in your home is a distribution of the asset. It’s not a prohibited transaction. It’s a different issue. It’s a distribution of the asset. Why? Because it violates the distribution rules and the holding rules of precious metals. Precious metals must be stored at a custodian. This means your bank, trust company, whoever you’re using for your IRA, typically will store your precious metals. So that’s what happened in that case. Now, some people have read the headlines and been like, Oh, an IRA LLC, someone who had a distribution of it. The IRS came after him. Yeah, because they used it wrong. There is a case for years ago, someone used an IRA LLC and paid themselves a salary. Also, you know, we heard the same, the same stuff. Well, you can’t do that either. It’s not the IRA LLC is wrong, it’s how people have used it. They violated the use rules.
Mark: There’s got to be a great analogy here.
Mat: It’s like a car. The car is the great analogy. Like saying someone ran a red light, someone drove six sixty five in a forty five Oh. Cars are illegal. No, it’s how they used the car. No, I love it.
Mark: This is such a good reminder, too. We’ve got a little rant video we threw out on YouTube on this. Some you might see it. And the real problem here is there’s some really charismatic people out there that are better than Mat and I at presenting, fine. And they get in front of a crowd and they scare people and they sound really convincing and they take a case and twist it. And why do they do this Mat? What is their motive?
Mat: They want you to do something else, something else instead of an IRA LLC or close your existing IRA LLC and move to whatever they’re selling.
Mark: They don’t want you to buy a car. They want you to buy a truck. So the truck dealership is telling you that cars are illegal. They’re not. So keep in mind, listen to where the voice is coming from. And I love these folks on YouTube are like, they’ve got all these plaques up behind them. If you look, they’re not lawyer or CPA certificates, they might be.
Mat: Yeah, these are. Yeah, you know, the one behind Mark are,
Mark: Yeah, those are legit. Now let’s get back to the fun part. Ok. What’s the name of this family again?
Mark: See, I can’t I can’t even get through McDonald’s now, Mcnulty’s. Ok, I got Nick Nolte. Now here’s the drawer that pulls this all together. Nick Nolte in 48 hours and McDougal’s in coming to America. Oh, what’s the common theme, huh? Eddie Murphy.
Mat: Eddie Murphy Oh, that’s right.
Mark: It’s all right. McGriddle. We can talk about McGriddles. Ooh, it’s morning. I like the McGriddles.
Mat: Oh, OK, I Love McGriddles.
Mark: Anyway, so you know, it’s funny. There’s all these crazy cases. And when you go to law school and and you start studying tax law because we’re geeks and we have nothing else better to do. We pretty much mock the names of most of the people in these cases. So you might think we’re a little dorky here, but when you’re reading court cases, you look for anything you can grab.
Mat: Just whatever can make it seem interesting. You just grab a hold of it and just soak every ounce out of it. But here’s it’s important. I want to say this is IRA LLCs are great strategy. Real estate investors use them. A lot of crypto investors are using them. People flipping a property or rental. It’s a really nice strategy and a really good tool. There’s been plenty of cases on it. Totally fine. It’s people that use it wrong. People who paid themselves a salary that was a case called Ellis vs. Commissioner. The IRS came after that person. You can’t do that. We’ve been telling clients ever since 2006 when we started doing these, you can’t do that. Yep. Same thing with someone owning precious metals and trying to store them at their house. I literally have articles on my website from five years ago saying, you can’t do that because people were out promoting it. So as long as you stay within the lines, use it properly, get with the licensed professional or get or figure out how to do it right. Get some real resources for people with real credentials that will give you confidence in using it properly. But we don’t want to throw out this awesome tool that has been valuable for many of our clients that I even use myself. You know, we use, ourselves, both of us, because it’s a great strategy and tool to have more control over your retirement account asset, keep it all tax deferred or tax free, depending on whether using traditional Roth. It’s an awesome strategy.
Mark: Ok, now. Before we I want to go. In fact, I think it would be helpful for everybody right now and Mat, we ought to think about an article on this. Busting the myths of the IRA LLC, Ooo. And let’s see if we can come up with 10. Ok. And so let’s do that now. Before we do that, I’ve got, we’re going to have a little interlude, if you’re watching us on YouTube, this is a special moment. Ok, I’m going into the metaverse and I will meet you there for the rest of the podcast for anybody that wants to join me. I got my Oculus Goggles on, which looked pretty cool. But the reason why I bring this up for all of you that are IRA investors, IRA self-directed, you know, managers of your LLC, I would say probably half of our clients have some touch with cryptocurrency or some form thereof. Maybe a third, is third ok?
Mat: Yeah, probably a third. Yeah.
Mark: Ok. So you’re listening. Guess what we’re doing? The first ever crypto taxation summit in America on January 29th. We’re trying to find a new location in Phoenix because we’re already sold out in person. You can buy virtual tickets right now at CryptoTaxSummit.com. Get over there, and we’re going to be talking about the Metaverse. We’re going to be talking about trading crypto inside your IRAs, your Roth, mining, staking, nodes, DeFi, charitable remainder trusts. Frickin, What else?
Mat: Yeah, what the wash sale rule, what some of the reporting issues that are coming out from the IRS, some of the legal issues on lending your crypto, some of the stuff the SEC has been doing. I mean, we’re going to hit some legal things to know. We’ve really been digging into it ourselves and trying to help advise our clients as well as investing ourselves. So we feel like, now we’re not crypto experts, we’re the crypto tax and legal experts. That’s what we can help you with. If you want all the tech details or what crypto should I buy or what rig should I set up for my mining? Don’t ask us. You don’t want our opinion on that. that ain’t what we do
Mark: Now I will say this.
Mat: We stay in our lane.
Mark: Yeah, but I will throw this out and Mat I was talking to our team about the disclaimer on our page for the event. It’s a fine line between how do you do a strategy and how is it taxed. Because in order to talk about how a strategy like DeFi or a node or staking or just trading is taxed, you have to talk about the process. And so we will be talking about processes. We’re not going to say that, you know, someone’s in the room is going to get a bent out of shape and go, Well, if you do it this way, you can do it better. I get it, OK, but we are going to be talking processes and strategies in order to explain where the IRS is standing with their handout. And so many people think, well, if it’s in my IRA, it’s never taxed, right? You might have what’s called UBIT because you’re doing business in the metaverse or crypto industry inside your IRA, even if it’s a Roth. So please put it on your calendar. It’s an all day. It will be recorded January 29th. Ok, you ready for our list Mat? 10 myths busting the IRA LLC myths. I’ll let you go first.
Mat: Ok, I’ll say myth number one that we just talked about. The IRA will seize on illegal myth number one. Ok, now again, there’s things you can do wrong. We already talked about that, but IRA LLC is definitely not illegal. You can use it. It’s been around for years. Pension plans use it, 401K plans use it when they buy apartment buildings and all this stuff. It’s the same set of rules you’re operating under with the retirement accounts
Mark: The SEC, they have departments to deal with this. They know this. They the crypto institutions, know this. The wallet’s the, you know, everybody knows that you can have an institutional LLC owned by IRAS. It’s not legal.
Mat: Yeah, the real estate industry, we’ve been doing it for years, of course.
Mark: Ok, my myth number two, you can be the manager of your IRA LLC. Now you’re going to hear custodians and trust companies around the country. I don’t want to accuse any of them and get a nasty letter in the mail, so I’ll just say there’s there’s Big Three, Big Four out there that have been around 20 plus years. Some don’t even say you can be the manager of the LLC. There’s nothing you can’t. It’s they just don’t like it. Yeah, OK. You can be the manager.
Mat: Yeah. Now with that, you can’t take a salary or receive any compensation. That was Ellis vs. Commissioner. It’s in my book and like we’ve said, we’ve advised you against our clients since 2006. It’s in our operating agreement. It restricts you. But the documents need to restrict that type of stuff what you can and can’t do as a manager. Ok. Myth number three, you can’t have multiple owners or individuals in an LLC with an IRA
Mark: Because you said, I’m going to put these in the converse. So we’re going to say it’s not illegal or you can be the manager and you’re saying you can have multiple partners.
Mat: Yes. The myth is that you cannot. Yeah. Yes. So, for example, Mark and I could set up an LLC. My IRA could own 50 percent Marks Roth IRA could own the other 50 percent. His no,
Mark: No, no, no, no. Mine owns 60.
Mat: Then yours would have to put in sixty thousand mine will put in forty thousand.
Mark: So let’s go back to 50 50.
Mat: Yeah, that sounds a little better. The rules matter. So but that’s what we call a multi member IRA, and this could be you and a spouse. Oh boy,
Mark: I’m coming to myth number four. We’re just saying, myth number three you can have multiple retirement account owners. All right. Ok. Ok. You know where am I going on number four?
Mat: Yeah, I like it. I was ahead of you. That was more like subpart three for me. But I like how you’re going with four because we got creates more. You got greedy. Now you’re going to take it.
Mark: Yeah, Mat’s a shooter. He, if he’s not
Mat: You feeding the ball. If I got the ball. I didn’t want to pass. Don’t make me pass. I got the ball.
Mark: Just serving you, ballers. You know this. I shoot till I get hot and then I don’t stop.
Mat: I like that there’s a Seinfeld episode where George is going to the gym, you know, and there’s a guy complaining how he doesn’t like to play with George, and he’s like, He’s a chucker. What’s a chuckle? Every time somebody just throws it up! He’s a chucker.
Mark: Oh, OK. I love it. Ok, now number four myth is. People. Including yourself. And family members can even be partners with an IRA with a retirement account in an IRA LLC. Did I say that right? How would you say it? People, human,
Mat: Qualified people, family, you know you and a spouse or your IRA and your spouses IRA, your Roth and your traditional. These are what are called disqualified under the rules, and that’s a prohibited transaction if you don’t know what that is. Go back to episode four or five of the directed IRA podcast where we get into that. But but while you can’t transact your IRA with your spouse’s IRA or your Roth IRA, you can’t sell something to your traditional IRA and vice versa. You can co invest into something like a new LLC. And so with these rules, there’s a lot of nuance, and I think this is where it gives people a lot of confusion and a window to say You can’t do it. You can, you can’t. And and you’ve got to really know the rules to know what can actually happen. And that’s what we’ve tried to master to really set the strategies of what’s really possible. As long as you stay in the lanes, you’ve got to stay in the lanes. Like, let me give a quick example, and this is where the myths can happen and what people get confused. Let’s say that. Let’s say that I had an LLC set up that my traditional IRA owned one hundred percent and I’m like, Well, I want to get my Roth IRA in there six months later, because now I’m moving my Roth over and I’m self-directing that, you can’t do it because I have to buy in essentially to that LLC. Now I could convert my traditional to a Roth and I could have a way around that. But so that’s just one Roth IRA owns the LLC. But all right, let’s see. It’s even spouses like your spouse has an IRA and you have an IRA. You can’t set up an LLC, a hundred percent with your IRA and your spouse come in a year later and buy into it because now you’re effectively selling ownership from your IRA to her IRA. But you can go in from the beginning and co invest. Ok, love it. We got a whole podcast episode on that multi-member IRA. We’ll see.
Mark: Yep. Okay, now I’ve got. I’ve got a five that I want to tee up for you, but unless you’ve got one at the top of your head, top of your mind.
Mat: I got one.
Mark: And it’s your turn. You got you can I can either throw you a softball or you can take yours.
Mat: Ok, I’ll take mine because this is a really this is an important one. Ok. A lot of people are sold. Let me say the the the myth. Can I give you the myth first? Then we’ll call
Mark: Well the non myth. The truth, the truth. The truth of
Mat: The truth is. A solo K doesn’t work for everyone. There’s a lot of people out there that say, Oh, don’t do an IRA LLC, do a solo K, OK? Do you qualify for a solo K? Solo K’s are meant for people who are self-employed or a small business owner with no employees. Now we love solo K’s. We set them up all the time. Some people throw a different little moniker on it and fancy name, but basically it’s a 401K plan that a company sets up for you as the only owner of the business. And maybe you’ve got a spouse and it can work for that two or a business partner. Solo K awesome, but some people don’t have a small business. They can’t set up a solo K, they’re retired and they are just working with their retirement plan money. They have no interest in having a side hustle or something to set this up. And so don’t think that everyone needs to go jump into a solo K, It depends on what you’re doing and whether you qualify.
Mark: Ok, so the myth is, or the truth about the myth is solo Ks are not always better than an IRA LLC.
Mat: And it’s not, not everyone can do a solo K. It’s not like you get everyone has a choice. Ok. All right. Some people do.
Mark: Ok. Ok. All right. Here’s number six. The truth is, you can pay personally for the setup of your IRA LLC, even though your retirement account is, owns the IRA LLC. Is that true? That was the one I was going to throw at you? That’s correct.
Mat: Yeah, you can pay for the expenses of the administration of your account, and the LLC is basically it protects the LLC, you know, your IRA from certain liabilities that can arise. That’s one of the benefits of the LLC.
Mark: So once the IRA LLC set up, though, then it needs to pay for its own expenses,
Mat: Right, correct. And like the investment expenses and things like that, the LLC is going to be paying for that. But you can personally pay for the IRA will see a setup section 4975 of the section that has prohibited transaction exemptions. The exemptions are in subpart D, and No. 10 is one that says so. This is forty nine seventy D10 if anyone wants to go read it and challenge me on it. But for nine seventy five D 10 says reimbursement or payment of administrative, accounting or legal expenses for the IRA are not a prohibited transaction. So paying the lawyer to set the LLC for the that the IRA is going to own. That’s a legal expense for the IRA. You can individually pay for that as a disqualified person. That’s OK, just like you can pay your account fees for your IRA personally if you want it or you can have your IRA pay for it. Frankly, a lot of our traditional IRA clients like to have their account pay for a Roth IRA. Clients want to pay for it personally because the two different taxation on how money comes out.
Mark: Ok. Ok, good, good, good. Ok, number seven, is there another myth out there that you’re like, Nope, this is the truth.
Mat: Yes. Here’s the here’s the truth. I like even the myth first.
Mark: Ok, go ahead. Go ahead.
Mat: Because I like to give the myth and then bust the myth.
Mark: Ok. All right.
Mat: The myth is do an IRA trust instead of an LLC
Mark: That was mine, that was mine.
Mat: You didn’t tell me, how do I know?
Mark: Well, freaking A, geez. That was my. I was all prepped for my turn.
Mat: Dude, I was like, I was like running to the hoop and you threw me the ball and then I’m I’m dunking it and you’re like, You wanted me to pass. Why you’re out on free throw line. What am I supposed to do?
Mark: Ok, I yeah. Ok, so the myth is a trust is just.
Mat: Ok, yeah. Now this is this is particularly popular in California. Why? Because LLC is in California. Have an eight hundred dollar fee. Even IRA LLCs. That’s a minimum tax you got to pay to the sovereign nation of the great state of California. Ok, so so we have clients that are like trying to get around that. And again, there there’s providers that want to tell you what you want to hear. It’s like, don’t set up an LLC, set up a trust and your IRA owns this trust and it’s a business trust or whatever they’re going to call it. Well, newsflash, California has no such thing. Can I use an out-of-state trust in California for this? Maybe. But the problem is really two problems. One. IRAs are trust themselves. An IRA is just a trust. Your the grantor and beneficiary of the trust during your life and your IRA custodian is the trustee. The laws say you must have a trustee of your IRA who’s a bank, credit union or trust company like us at Direct, a trust company here where a trust company, we’re audited, regulated all that stuff and you have to do all those things in order to trustee IRAs.
Mat: Well, if my IRA just sets up another trust, my IRA is a trust and then my IRA sets up another trust that my IRA invests its money into. Well, who’s the trustee of that trust? Is that the me? Can I be that or do I need to have my IRA custodian be trustee of that? I don’t know. And that’s the gray area. And, you know, we probably could have set up twenty thousand of these by now in California, who trust me, we want that to be a legit strategy. We set so many of those up, but we just don’t feel comfortable with it. Don’t think it works if anyone here at directed IRA that wants to do it. We’ve had clients ask, I say great, get a lawyer to set it up. That’ll sign an opinion letter that says it’s legit. That’s what our law firm KKOS Lawyers does and we set up an IRA LLC. We sign an opinion letter. We say it’s legit. Follow these guidelines and operating it. We never get real lawyers that’ll sign off on those for the IRA trusts. So just be careful on that one. That’s definitely a myth.
Mark: Ok, I’m trying to think of eight. This may only be seven. My.
Mat: By the way, I want to be wrong on some of these, I wish I was wrong. These are these make these name things, think of products we could sell and make money on. And so I actually want to be wrong on some of these. I don’t.
Mark: Yeah, yeah. Is this a myth that my IRA LLC cannot invest outside of the United States, is there any international kind of myth like.
Mat: Yeah, well. Um, a lot of IRA custodians restrict a foreign investment, not because IRAs can’t own foreign assets, just because it’s a pain in the neck, so even at Directed IRA. We won’t let your IRA own a foreign asset directly, except in super limited situations, which is really it’s basically high end hedge fund that have an offshore feeder multinational law firm involved super complex structure. Ok, but generally, if you’re like, Well, I want to buy real estate in France, like we had a client a couple of weeks ago. So I want to buy real estate in France. I don’t know how to read all the documents in French. I’m not going to employ people over here,
Mark: Now don’t get me wrong. Mat knows the language of love,
Mat: But yeah, just not French. So a little different. This is, by the way, this is my my lunch right here, huh? This is meat lovers. You know, if you didn’t know a little different than the language of love, this is December 30th. If anybody knew this is, I think, my last pizza I’m going to have for a while. So I’m just like going all in. It was like New Year’s resolutions are two days away. I got to get it in while I can. Hmm.
Mark: Well, all right. Ok, so here’s the assets. So the Myth B IRAs cannot own foreign assets, but the IRA LLC opens that door.
Mat: Exactly. So a lot of times we’ll just use a U.S. based IRA LLC. Have your IRA, own an LLC, and then that LLC goes and owns the foreign asset or the foreign company. We have lots of clients that have done that. Now, when you’re owning a foreign asset, keep in mind you’ve got a foreign bank account reporting requirements to the IRS, foreign asset reporting requirements to the IRS. It starts to get a little more dicey. So make sure you’re getting good international tax counsel. That’s not something your typical lawyer can help you with. Even here at KKOS Lawyers, we can help you, but that’s you’ve got to realize that’s a that ain’t like easy. So while it’s possible, just know it’s a little more complicated now. The the practicality of it is why the myth exists. Just because if you call it your even any other self-direct diary, because you’re like, I want to buy property in Belize, yeah, you can’t do it. And that’s just because none of these IRA custodians like we charge two hundred ninety five bucks a year. I don’t want to get a subpoena in France or Belize or a legal notice that we don’t know what the heck to do with that stuff on your account. It’s hard. Auditors and examiners look at those in the process. It’s just a little dicey. So use the LLC structure. It’s actually a great solution.
Mark: Um. Ok, so any other myths?
Mat: My long explanation there was buying you some time.
Mark: No, I know, but I think we may be out at eight.
Mat: I think we have the great eight, you know?
Mark: Yeah, yeah. Yeah. So we’re going to call this busting eight myths about the IRA LLC. Well, I just can’t think of another one that people go well, IRA LLC. Maybe or too expensive or
Mat: They can be. I mean, you know, we see people paying thirty five hundred five thousand bucks for these. You know, we charge 800 bucks for an LLC or IRA on one hundred percent fifteen hundred bucks if it’s a partnership with multiple IRAS, multi members, what we call it. So and I’ve seen other lawyers kind of in the thousand or two thousand range that know what they’re doing. So if you’re paying more than three thousand, you must be doing something complex. Yeah. Or you’re a lawyer or you’re just a really overpriced or expensive lawyer.
Mark: True, true. I. I don’t know. I think. I think that’s it. I I really
Mat: Just have to stretch for 10, if there’s a that’s OK.
Mark: I don’t know. I guess another myth is I could do it myself. You know, I could set up my own IRA LLC. And the reality is, is as we at our trust company and others around the country, they’re not going to take self prepared docs. They’re going to want a lot of times they want a letter of comfort from the law firm that set it up, saying, Hey, we verify we’ve met all the rules under DOL and IRS,
Mat: And I can get us to 10 great. Those are great. That’s a great point. So that’s that’s 9 right there, right? So that that you can set it up yourself. So now, could you possibly? But the operating agreement for the LLC is very unique. The LLC has a Manager Managed LLC. A lot of people just set up member management. It’s wrong the way you get the EINs a little unique for an IRA LLC than a regular LLC you may personally own. There’s a lot of quirks to an IRA LLC that’s different from a regular one. Our operating agreement for an IRA LLC has about 10 to 12 different sections that are unique for IRAs. Owning an LLC and every IRA custodian that allows them is going to go through a compliance check for those sections. Another in my book, you could read them. I have a checklist in my book on what these sections are. But and so you could try to create that. But by the time you’ve done that, you would have wasted more time trying to be, you know, lawyer on TV, like play a lawyer, you know, so I think find some training that has a reasonable fee and you can get it done. But here’s the here’s 10, though. I can get up to 10.
Mark: Ok, number 10
Mat: 10, 10 was the myth. I’m going to do the myth, and the myth is I can use an LLC I already own. I already got an LLC Mark. You know, this is an LLC. I used to own a rental property in, and I’m not using it anymore. I sold the rental. Can I just or this is an LLC I just set up and I never did anything with that. I’ll just change the ownership from me to my IRA. No, no, no, no, no. That’s a primitive transaction. You can’t transfer ownership of an asset from you personally to your IRA. That would be prohibited, so the IRA needs to own it from the beginning.
Mark: I love it. Great. Great. Great job, Mat. Well, I’ve been taking notes over here. I got to get on a plane in an hour or so, and I’m maybe I’ll work on that article on the plane.
Mark: Yeah if you get over to my website, MatSorensen.com I got the old link that Article two on the the McNulty case, McNulty versus commissioner. This was about a month ago that it came out, and you can actually read the case for yourself. I give you the whole case, you can read it. I put out the holding in the article so you can kind of read up for yourself, but also just know seek out professional advice as you’re looking to do some of these structures. And when someone is telling you something’s illegal, just consider the credentials and who’s you know, advising you what you can or can’t do with your retirement account.
Mark: Ok, I like it. Thanks, everybody, for being here, and thanks for putting up with our antiques jokes. I really want to apologize on behalf of my partner for the liberties he takes with his jokes that are probably inappropriate for many of you, but at least, you know, I’ll bring you back to center here.
Mat: So, you know, that’s you know, it’s the yin and the yang of the Directed IRA podcast. But hey, what do you expect? We’re talking about a tax court case. Congratulations. If you’re still listening. You listen to a podcast about a tax court case. Good for you. All right. Well, thanks, everyone. If you want to learn more about the Directed IRA podcast, go to DirectedIRA.com/Podcast. Of course, you can find it on all the channels. It’s on our YouTube channel as well under the Mat Sorensen YouTube channel. You can find Mark at Mark J. Kohler YouTube channel on our sister podcast Mainstreet Business. We’re just trying to give great information, help you take control of your retirement and better self-direct it. That’s really our mission at Directed IRAs to help self-direct investors succeed, and we just want to help be a part of that.
Mark: Thanks, everyone. See you next. Oh, and see you at the Crypto Tax Summit. So get there, folks. If you’re going to put any sort of crypto in your retirement accounts, there’ll be a section in the summit on that topic. Probably open up some other doors for you, too.
Mat: Yeah. Till then, stay calm and self-direct on.