Wednesday, April 14, 2010

Self-Directed IRA Almost Ready To Roll

I received my LLC paperwork package in the mail two days ago. Today, I received confirmation that the LLC creation notice has been published in a newspaper of record (as required by law). My next steps are:

  1. Send the IRA custodian instructions to issue a check to the LLC for the purchase of membership shares. This is where my IRA takes ownership of the LLC, thus giving me a self-directed IRA.
  2. Return the membership roster and member share certificates to the company that set up the LLC for me. (The company is related to the IRA custodian, but not technically the same company.)
I could go open a bank account now using the LLC documents I have, but I will wait until I get the check first, since I don't feel like trying to see if I can open a checking account without making a deposit. Why complicate things?

I'll get all the forms mailed out tomorrow, so I figure it should be a week before my check arrives and I can open a bank account.


iggy said...

what were your total costs to get it all setup?

Shaun said...

Total costs were $2,750, which can be paid from the IRA itself. That was a $2,000 set up fee for the company to set up the LLC, $50 for the IRA custodian setup fee, and a $225 yearly fee from the IRA custodian. The LLC setup fee is a bit high, I know, but they have a special LLC operating agreement for LLCs of self-directed IRAs, so I went with them instead of using my CPA to create it or create it myself. I figure it'll take me about 9.5 months to recoup that money from my HML investing. The yearly fee is also high, but it should be less than 1 month's income for me. That fee can be waived if you keep enough funds in the IRA (instead of transferring them to the LLC).

This IRA is a rather small amount, as it was a 401(k) rollover from an old job. If it was a larger amount, I'd recoup it faster, obviously.

Secret Shopping Blog said...

Seems like a solid plan, though the start-up fees are a bit overwhelming.

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