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Background: I have a self directed Roth IRA that owns an LLC…

Background: I have a self directed...
Background:
I have a self directed Roth IRA that owns an LLC for checkbook control of investments. The LLC has made a private lending "investment" note for real estate development that should turn around sometime in the next 6 months or so. To try to make things simpler with money going back and forth between the LLC account and the developer after sale of the property, we have devised a "holding" note that would be signed after the sale that says the developer can hold X $ amount for 2 months while shopping for the next deal. Once the deal is found a new "investment" note would be signed for X $ amount.Question:
From my understanding, at the end of the year the custodian of the Roth IRA will need to know how much the LLC is "worth" for their legal reporting purposes. My question is do I have to have the developer write me a check after each sale or is this "holding" / "investing" strategy ok so long as I am keeping record of the deals/returns, getting the paperwork signed for each note, and reporting to the custodian the end year value?
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Answered in 2 hours by:
4/19/2017
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,859
Experience: Taxes, Immigration, Labor Relations
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The custodian doesn't collect information about the value of the LLC.

From the custodian prospective - the LLC is an asset purchased in your IRA account - and whatever were contributed into that asset will be considered its value.

You do NOT need to report anything inside the LLC to the custodian.
Only if the LLC is liquidated - at that time - the money are transferred to the custodian - and that is recorded as a "sale" of the investment asset.

Lev
Lev, Tax Advisor
Category: Tax
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Experience: Taxes, Immigration, Labor Relations
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