Self-Directed IRA

For those who are not self-employed and want to make alternative investments.

What is a Self-Directed IRA?

A Self-Directed IRA allows investors to use retirement funds to buy alternative assets. You won’t find the term “Self-Directed IRA” anywhere in the Internal Revenue Code; it simply refers to an IRA account that is permitted to be invested in traditional assets like stocks, but also alternative assets, like real estate and cryptocurrencies.  In the last several years, the number of self-directed IRA accounts has grown significantly.

The Internal Revenue Code does not describe what a self-directed IRA can invest in, only what it cannot invest in. In general, as long as the self-directed IRA does not purchase life insurance, collectibles, or engage in a prohibited transaction outlined in Code Section 4975, then the investment can be made.

Using a Self-Directed IRA to make investments with your retirement funds can be a great way to diversify your retirement portfolio and will give you the opportunity to invest in hard assets you know and understand. 

Next, you’ll find a short overview of what IRA Financial Group’s Self-Directed IRA offers. You can also check out our learn more pages for in-depth information, and learn how you can benefit from a Self-Directed IRA.

from $1250

one-time establishment fee

$180/yr

IRA custodian fee

What’s included?

  • Establishment of a Self-Directed IRA “Checkbook Control” plan
  • Acquisition of LLC Tax Identification Number
  • Establishment of account with IRS Approved Custodian
  • Generating special purpose Operating Agreement
  • Generating special purpose Subscription Agreement
  • Assistance with the transfer of funds to an FDIC-insured IRA Custodian
  • Assistance in the establishment of business bank account
  • Assistance in completion of documents to transfer funds to LLC
  • Free tax consultation on the UBTI and UDFI rules
  • Memorandum on the Self-Directed IRA LLC Structure
  • Free tax consultation with CPA on Self-Directed IRA LLC tax reporting guidelines
  • Free consultation with in-house tax professional on the Self-Directed IRA LLC structure and prohibited transaction rules
  • Guaranteed IRS audit Protection regarding the legality of the Self-Directed IRA structure

What our Self-Directed IRA offers

Checkbook Control

With our checkbook control plan, you’ll be able to make IRA investments without having them approved by a custodian. Every decision is truly yours and may be carried out by simply writing a check or executing a wire transfer.

Tax Advantages

This plan gives you all the tax advantages of a traditional IRA, as well as tax deferral or tax-free gains in the case of a Roth IRA. All income and gains generated by your IRA investment will flow back to your IRA tax free. 

Invest In What You Know

With this plan, you can make almost any type of investment, including real estate, private business entities, tax liens, precious metals, cryptocurrencies, private businesses, and more tax-free. Diversify and better protect your retirement portfolio.

Limited Liability

Your IRA will benefit from the limited liability protection afforded by an LLC. All your IRA assets held outside the LLC will be shielded from attack.

Strong Creditor Protection

IRA will generally be protected for up to $1 million in the case of personal bankruptcy. In addition, most states will shield an IRA from creditors’ attack against the IRA holder outside of bankruptcy. 

Speed & Lower Fees

When you find an investment that you want to make with your IRA funds, simply write a check or wire the funds straight from your IRA LLC bank account. This allows you to eliminate the delays associated with a custodian controlled IRA.

What you can do now

Learn if you qualify

Don’t know which plan you qualify for? Have questions about a transaction? Our tax professionals are here to help and will get back to you ASAP.

Open An Account

We’ll take care of everything. We’ve helped over 12,000 clients open self-directed retirement accounts over the last 10 years. The whole process can be handled by phone, email, fax, or mail. Our expert tax and ERISA retirement professionals are on-site, greatly reducing the set-up time and cost.

Call us at 800-472-0646 to get started; we’ll help you get a self-directed retirement structure started within minutes.

Learn More

We have a ton of resources that will help answer all your questions. We understand the importance of education when it comes to retirement, and we want to make sure you’re confident about every decision you make.

The button below takes you to our learn more pages, but you also have access to our Forbes articles, blog, videos, and podcast.

Terms you may have heard

We know there’s a lot of information out there; these terms will help you sort through the different types of plans.

Limited Liability Company

Limited Liability Company (LLC) has rapidly become one of the most popular business entity types for all types of businesses. This is largely because it is an LLC is considered to be simpler and more flexible than a corporation. The LLC business structure combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. 

Limited Liability Companies, like corporations, are recognized as separate legal entities, meaning its members are protected from company debts, obligations, and liabilities. In the self-directed IRA LLC context, the IRA owns the LLC and the manager  of the LLC is the IRA holder (you).

Checkbook Control

A Checkbook Control structure is a term used when an IRA holder has complete control over his or her retirement plan and investment opportunities. This includes discovering traditional and alternative opportunities, selecting assets for investment and much more. With this structure, you eliminate the need of custodian approval, thus eliminating custodian delays and fees. 

 In order to obtain checkbook control, first  establish a Limited Liability Company. Your IRA (individual retirement account) will own the LLC. However, you as the IRA holder, are manager. You must set up a checking account in the name of the LLC.

Prohibited Transactions

All retirement accounts have rules and regulations set by the IRS (Internal Revenue Service). This is the same for all types of Self-Directed IRA retirement plans. In the case of a Self-Directed IRA, not following the prohibited transaction rules can lead to high taxes and even disqualification of your IRA. 

According to the IRS, prohibited transaction are “…Certain transactions between a retirement plan and a disqualified person.” The Internal Revenue Service goes on to say that a prohibited transaction in an IRA is “…Any improper use of an IRA account or annuity by the IRA owner, his or her beneficiary or any disqualified person.”

The IRS doesn’t state what a Self-Directed IRA can invest in, but investments the IRA cannot make.

Disqualified Persons

Most prohibited transactions in a Self-Directed IRA involve dealing with a disqualified person. The IRS prohibits certain transactions involving the individual retirement account and the disqualified transaction. To remain compliant while self-directing your investments, you must avoid any transaction with disqualified persons. If you don’t, you can incur high penalties.

The primary reason IRA holders are not allowed to make certain transactions with disqualified persons is due to the self-dealing laws. This is when the IRA holder (or trustee) places his or her interests above the interests of the IRA. The purpose of an IRA is to save for retirement, not to benefit you personally prior to retirement age.

You can find the list of disqualified persons on the IRS website.

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