Self Directed IRA

[DaveO]

I have a client much as you all do that is always trying to work a new tax angle in one way or another. He approached me a couple of years ago with the idea of a self directed IRA to own real estate. My advice was simple, don’t do it. I also advised him of the hazards of prohibited transactions, non-recourse loans and so on.

This year he calls to tell me he did it but that he found a local “expert” knowledgeable in all areas of tax law that would insure the whole thing went off without a hitch. Later he calls to tell me the expert doesn’t really know anything about self directed IRA’s.

He has combined a ROTH IRA, a Traditional IRA and a Solo 401K for himself plus a ROTH Ira for his wife into a single property. He wants me to prepare the 990 for the whole mess. I’m no expert in this area but to me it seems he has already disqualified all his accounts. Lacking any license or direct experience in this area I’m reluctant to even advise him. What do you all think?

[ChEAr$]

Just when you thought you'd seen 'em all!

I have a client much as you all do that is always trying to work a new tax angle in one way or another. He approached me a couple of years ago with the idea of a self directed IRA to own real estate. My advice was simple, don’t do it. I also advised him of the hazards of prohibited transactions, non-recourse loans and so on.

This year he calls to tell me he did it but that he found a local “expert” knowledgeable in all areas of tax law that would insure the whole thing went off without a hitch. Later he calls to tell me the expert doesn’t really know anything about self directed IRA’s.

He has combined a ROTH IRA, a Traditional IRA and a Solo 401K for himself plus a ROTH Ira for his wife into a single property. He wants me to prepare the 990 for the whole mess. I’m no expert in this area but to me it seems he has already disqualified all his accounts. Lacking any license or direct experience in this area I’m reluctant to even advise him. What do you all think?

First question is what's purpose of the form 990? (I really don't have a clue here.)

You might at least ask him for all the paperwork which established this.. uh...
whatdoyoucallit? entity? Might be interesting reading before you inform him to
find someone else.

[JG EA]

I agree that it sounds like something wrong. But how did it get combined. The " ROTH IRA, a Traditional IRA and a Solo 401K for himself plus a ROTH Ira for his wife into a single property" ?

He didn't sell out and buy did he? Instead, a legal document was made up to put these into a self-directed IRA?

Without knowing everything was done correctly, I would never file this return.