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Can a Self directed IRA that has invested in a LLC pay the medical Insurance premiums for the LLC members?

I have an IRA self directed with checkbook control. My only investment is a Real Estate LLC that invests in real estate. There are two members of this LLC. Can the IRA pay their monthly medical premiums since this is an expense for the LLC? Thanks.

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This entry was posted on Thursday, March 18th, 2010 at 6:42 pm and is filed under Self-Directed IRA. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

8 Responses to “Can a Self directed IRA that has invested in a LLC pay the medical Insurance premiums for the LLC members?”

  1. src50 Says:
    March 18th, 2010 at 6:31 pm

    No.

  2. Tom Z Says:
    March 18th, 2010 at 6:31 pm

    It really does not matter that your IRA is self directed with checkboook control. Nor does it matter that the investment is a Real Estate, LLC.

    The purpose of an IRA is to provide a tax deferred vehicle for the establishment of a retirement fund. If you are 59 1/2 years you can take a distribution from your IRA to pay for whatever expense you deem necessary however you will pay income tax on the distribution. If you are not 59 1/2 you will pay a 10% penalty as well as income tax.

    Perhaps you are confusing an IRA with an HSA .

  3. IRAman Says:
    March 18th, 2010 at 6:50 pm

    If the members of the LLC are the beneficiaries of the IRA that invested, then probably not as they would be prohibited parties. Have your CPA review information in the IRS publication 4975 to see how it would apply to your situation.

    Should you need more help, check out our CPA listed underlinks.

    thanks,
    IRAman

    (all information given is for informational and educational purposes only and should not be construed as professional advice. Consult your attorney and CPA for further information)

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    March 19th, 2010 at 1:15 am

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  7. Alethia Franch Says:
    March 31st, 2010 at 12:17 am

    You are making several strong factors within your post and would most likely accept the majority of.

  8. jinnie@gist Says:
    April 3rd, 2010 at 12:18 am

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