IRA LLC Rollover

[Randy Watson]

Can an IRA LLC (the sole member of which is the IRA custodian for the benefit of the taxpayer) receive a rollover of the taxpayer's qualified plan benefit without violating the prohibited transaction rules?

[Guest Rajeev]

It all depends on how the Operating Agreement of the LLC has been written and what causing the additional capitalization of the LLC.... please work with an attorney knowledgeable about this

[QDROphile]

A rollover is to an IRA, not an LLC in which the IRA invests. Perhaps the disregarded entity rules allow cutting corners on observing the formalities relating to the distinction, but I would prefer a two-step process, and a plan administrator executing a direct rollover would be more comfortable with sending funds to a designated IRA rather than an LLC.

[mbozek]

I am a lost on what is the structure of the transactions. If the taxpayer is a non owner employee who is rolling over his assets in a Q plan to an IRA to purchase stock of an LLC established by the taxpayer you need to review the IRS rules for ROBS.

I ignored this post because I do not know what is an IRA LLC.