1. “Self-Directing Your Retirement Plan: What Can I Really Do?” Mark J. Kohler, CPA and Attorney at Law www.kkolawyers.com 856 South Sage Dr., Suite 300, Cedar City, Utah Telephone 435.586.9366 / Facsimile 435.586.9491 © Kyler Kohler & Ostermiller, LLP 2007

2. Disclaimer- Although the information contained in this Presentation may be extremely useful and helpful, please understand that the presentation of this information does not constitute an attorney-client relationship. Moreover, the information contained in this Presentation is for general guidance only. It is strongly recommended that each individual or entity obtain their own legal advice, particularly applied to their own set of circumstances, facts and specific situation. Kyler Kohler & Ostermiller, LLP is not responsible or liable for any advice that is taken and applied in a situation without direct consultation and representation specific to that individual’s or company’s needs. Instructor Notes © Kyler Kohler & Ostermiller, LLP 2006

3. Option 1 IRA $$ SDIRA $$ Raw Land - No Debt - No LLC/LP - No Partners - Direct Investment in name of IRA Self-Directing Your Retirement Plan for Real Estate: What Can I Really Do? Qualified Money and Real Estate

4. Option 2 IRA $$ SDIRA $$ Rental Property (Income Producing) Non-Recourse Loan Mortgage Company - Non-Recourse Debt - No Personal Guaranty - No Sweat Equity - No LLC/LP - No Partners - Direct Investment in name of IRA Self-Directing Your Retirement Plan for Real Estate: What Can I Really Do?

5. Qualified Money and Real Estate Option 3 IRA $$ SDIRA $$ Rental Property (Income Producing) Non-Recourse Loan Mortgage Company - Non-Recourse Debt - Single Member LLC - UDFI tax - No Personal Guaranty - No Sweat Equity - No Partners - Direct Investment in name of IRA Single Member LLC Self-Directing Your Retirement Plan for Real Estate: What Can I Really Do?

6. Qualified Money and Real Estate Option 4 IRA $$ SDIRA $$ 50% Limited Liability Co. or Limited Php. IRA Owner 40-45% Mortgage Company Guarantor Rental Properties 3 rd Party Owner 5-10% - Recourse Debt - YES - Partners -YES - LLC/LP- Yes Self-Directing Your Retirement Plan for Real Estate: What Can I Really Do?

7. Qualified Money and Real Estate Option 5 Self Directed 401K or Defined Benefit Plan 50% Limited Liability Company Mortgage Rental Properties Bs. Entity - Defer up to $45,000 in 2007 in 401K - Contributions vary for DB Plan IRA Owner 40-45% Guarantor 3 rd Party Owner 5-10% Self-Directing Your Retirement Plan for Real Estate: What Can I Really Do?

8. Self-Directed Plan Compliance Issues Must be Real Estate Operating Company if the Retirement Plan and IRA Owner own more than 25% of the LLC/LP See 29 CFR Section 2510.3-101 Can’t have 100% control of LLC/LP Prohibited Transactions Transactions with Prohibited parties Use of Property Compensation of IRA owner Administration duties Annual report/valuation to Custodian Bookkeeping and tax return BEWARE!! This is not a comprehensive list, and also requires a properly drafted Company document!! Self-Directing Your Retirement Plan for Real Estate: What Can I Really Do?

9. UBTI and UDFI Unrelated Business Taxable Income (“UBTI”) Exemptions for rental income, interest income, gains from sale of property other than property held for sale in the ordinary course of business. Unrelated Debt Financed Income (“UDFI”) Two Tier Analysis Real Estate Professional / Dealer Status Debt is the key calculation Trust Tax rates 990 Tax Return for IRAs, 5500 for 401ks ** This is only a survey of points to consider, these rules must be studied and implemented with care. Self-Directing Your Retirement Plan for Real Estate: What Can I Really Do?

10. For more information, please contact us at: KYLER, KOHLER & OSTERMILLER 856 South Sage Dr., Suite 300 Cedar City, Utah 84720 Tel: 435.586.9366 Fax: 435.586.9491 www.kkolawyers.com