Journal entries for IRA-owned wrap? - Posted by Bob Smith

Real Estate Investing Real Estate Financing
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Posted by John Merchant on March 17, 2006 at 17:30:00:

Using a wrap typically implies the property buyer/seller is going to make payments to the bank or his seller, while receiving a larger payment from his buyer.

Problem? Since a payment has to go out every month, it’d be messy having the SDIRA custodian (Equity Trust, et al) make those monthly payments.

Solution: Direct the SDIRA Custodian to buy the shares in the new LLC you’ll establish for an amount that you figure will cover your payments to that bank while you’re waiting for your cash-out.

Then your LLC makes the monthly payments to the bank, receives the payments from your buyer, etc.

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Journal entries for IRA-owned wrap? - Posted by Bob Smith

Posted by Bob Smith on March 08, 2006 at 20:56:59:

How do I keep the books for an IRA-owned wrap? Obviously the interest on the underlying note(s) isn’t a deduction per se, as that would imply the underlying was an obligation of the IRA. That not only isn’t factually correct, such an interpretation implies the wrap was debt-financed, unfairly subjecting the IRA to income tax.