The SEP Self-Directed IRA LLC Solution
What is a SEP?
A SEP is a simplified employee pension plan. Any employer can establish a SEP. An employer can maintain both a SEP and another plan. Annual contributions an employer makes to an employee's SEP-IRA cannot exceed the lesser of (i) 25% of compensation, or $55,000 for 2018. However, special rules apply when figuring out the maximum deductible contribution for a self-employed individual (typically 20% of compensation).
What is a SEP Self-Directed IRA LLC?
A Self Directed SEPIRA LLC "Checkbook Control" structure is an IRS approved and Tax Court certified structure that offers one the ability to use his or her SEP IRA funds to make almost any type of investment on their own without requiring the consent of any custodian. Tired of being forced to invest in stocks or mutual funds? Have an investment opportunity, such as real estate or a business investment that you would love to make with your ISEP RA funds... then the Self Directed SEP IRA LLC is your solution.
By gaining "checkbook control" over your SEP IRA funds you will gain the following advantages:
"Checkbook Control": You will no longer have to get each investment approved by the custodian of your account. Instead, as manager of the SEP self directed IRA LLC, all decisions are truly yours. To make an investment, simply right a check and use the funds straight from your Self Directed SEP IRA LLC bank account.
For example, Jen, who is self-employed, has established a SEP Self Directed IRA LLC. Jen's SEP IRA care of the custodian is the sole member of the LLC and Jen will be appointed as manager of the LLC. Jen has opened her Self Directed SEP IRA LLC bank account at a local bank. The name of Jen’s Self-Directed SEP IRA LLC is ABC LLC. Jen wishes to use her IRA funds to purchase a home from Jack, an unrelated third-party (non-disqualified person). Jack is anxious to close the transaction as soon as possible. With a "checkbook control" Self Directed SEP IRA LLC, Jen, as manager of the LLC, can simply write a check using the funds from the ABC LLC bank account or can wire the funds directly from the account to Jack. Jen, as manager of the LLC, no longer needs to seek the consent of the custodian before making the real estate purchase. With a regular Self Directed IRA without "checkbook control", Jen would likely not be able to make the real estate purchase since seeking custodian approval would have likely taken too much time.
Investment Opportunities: With a Self-Directed SEP IRA LLC, you will be able to invest in almost any type of investment opportunity that you discover, including: real estate (rentals, foreclosures, raw land, tax liens etc.), private businesses, precious metals, hard money & peer to peer lending as well as stock and mutual funds; you're only limit is your imagination. The income and gains from these investments will flow back into your SEP IRA tax-free.
Low Custodian Fees: A Self-Directed SEP IRA LLC "Checkbook Control" structure will help you save a significant amount of money on custodian fees. With a Self Directed SEP IRA LLC with "checkbook control" you no longer have to pay excessive custodian fees based on account value and transaction fees. Instead, with a "checkbook control" Self-Directed SEP IRA LLC, an FDIC backed IRS approved passive custodian is used.
The custodian in the "checkbook control" Self Directed SEP IRA LLC structure is referred to as a "passive" custodian largely because the custodian is not required to approve any SEP IRA related investment and simply serves the role of satisfying IRS regulations. By using a Self Directed SEP IRA LLC with "checkbook control" you can take advantage of all the benefits of self-directing your retirement assets without incurring excessive custodian fees and custodian created delays.
All the Passive Custodians we work with are FDIC backed and IRS approved. Once your custodian has transferred your retirement funds to the IRA Passive Custodian, the IRA Passive Custodian will immediately transfer your funds to your new SEP IRA LLC which can be opened at any local bank, where you as manager of the SEP IRA LLC will have "Checkbook Control" over those funds.
Investments Made Quickly: With a Self-Directed SEP IRA LLC "Checkbook Control" structure, you will have the power to act quickly on a potential investment opportunity. When you find an investment that you want to make with your SEP IRA funds, as manager of the SEP IRA LLC, simply write a check or wire the funds straight from your Self Directed SEP IRA LLC bank account to make the investment. The Self Directed SEP IRA allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.
Tax-Free Gains: With the Self-Directed SEP IRA LLC "Checkbook Control" structure, all income and gains from the SEP IRA investments will generally flow back to your ISEP RA LLC tax-free. Because an LLC is treated as a pass-through entity for federal income tax purposes and the SEP IRA, as the member of the LLC, is a tax-exempt party pursuant to Internal Revenue Code Section 408, all income and gains of the LLC will flow-through to the IRA tax-free!
Direct Access: With a Self-Directed SEP IRA LLC "Checkbook Control" structure, you, as manager of the SEP IRA LLC, will have direct access to your SEP IRA funds allowing you to make an investment quickly and efficiently. There is no need to obtain approvals from your custodian, or deal with time delays in awaiting approval from your custodian or paying any review fees.
Limited Liability: By using a Self-Directed SEP IRA LLC with "Checkbook Control", your SEPIRA will benefit from the limited liability protection afforded by using an LLC. By using an LLC, all your SEP IRA assets held outside the LLC will be shielded from attack. This is especially important in the case of SEP IRA real estate investments where many state statutes impose an extended statute of limitation for claims arising from defects in the design or construction of improvements to real estate.
Asset & Creditor Protection: By using a Self-Directed SEP IRA LLC with "Checkbook Control", the SEP IRA holder's IRA will be protected for up to $1 million in the case of personal bankruptcy. In addition, most states will shield a Self Directed SEP IRA from creditors attack against the IRA holder outside of bankruptcy. Therefore, by using a Self-Directed SEP IRA LLC, the IRA will be generally protected against creditor attack against the SEP IRA holder.
To learn more about the Self Directed SEP IRA LLC solution, contact one of our SEP IRA Experts at 800-472-0646 today!