There is no doubt that the real estate IRA process can be complex. But transferring assets or funds into your self-directed is quite easy. Once you have chosen your custodian, you need to arrange to move your existing IRA(s) or SEP IRA(s) into the new account that you have set up or to “roll them over” into your new self directed plan.
You may want to set up a limited liability company (LLC) for your IRA. A limited liability company is a “pass through” entity, but it also will provide some liability protection. Make sure to consult with a legal or tax professional.
Contact the new custodian and obtain the required forms. Your custodian will be a tremendous help to you and will provide you with the support you need. Complete all the required forms and send them back as soon as possible to your new custodian. At first glance, the forms appear complex but they really are not that challenging to complete.
Once your forms are processed by the new custodian, a transfer form will be sent to your current custodian. The custodian is required to honor the request and transfer or roll over your IRA(s) or pension plan(s), knowing that your qualified (tax exempt) funds won’t be taxed or penalized. Your new custodian will monitor the transfer until it is completed. They won’t get paid if the funds do not get transferred, so they are very motivated to assist you with this process.
I would recommend (and some custodians may require) that you include in your transfer package a copy of a recent statement from your existing IRA account. Your existing custodian may in fact require additional forms in order to finalize the transfer. Some custodians have a tendency to drag the process out longer that it should take.
The process of transferring your funds to a new custodian is certainly not very difficult. Just make sure that all the information (and forms) are completed and submitted on a timely basis. This will expedite the process and allow you to manage your self-directed assets as soon as possible.
Additional Information:
If you are looking for FREE information on the benefits of a real estate ira or if you are looking to set up an IRA LLC, please visit our site at IRA LLC.
This article is for informational purposes only and is not meant to be tax or legal advice. Each situation is different and you must discuss your cancellation of debt issue with a qualified tax or legal professional. This article is not written to be used for the purpose of avoiding penalties under the Internal Revenue Code.
