Real Estate under LLC as Investment in 401(k)/PSP

[Guest YATPA]

Attorney/client has come to us with the idea of moving existing real estate he has in plan into an LLC. He thinks that will (1) eliminate the requirement to have an annual appraisal/valuation and (2) provide a means for the recordkeeper/custodian to include it as an asset on their daily platform.

I know that a valuation will still be required, but can you reference a site or documentation on this so that I can provide to him? Also, any thoughts on a way to accomodate this type of asset on a "daily" platform?

Thanks in advance for any advice or comments.

[mbozek]

Rev. Rul 80-155

[Alf]

Great cite! Doesn't this make the valuation issue more complicated because now the LLC has to be valued which requires the land to be valued?

Initially, this sounded like it raised UBIT or prohibited transaction issues, but it would probably work from those perspectives. Single member LLC would be disregarded, presumably.

[Kirk Maldonado]

Alf:

My recommendation is that you retain an knowledgeable ERISA to advise you on this matter because mistakes could be very costly.

[Alf]

Not a great cite!