An Illinois Self-Directed IRA LLC with “Checkbook Control” offers you the ability to use your retirement funds to make almost any type of investment, including real estate, on your own without requiring the consent of any custodian. Have an investment opportunity in Illinois, such as real estate or precious metals that you would love to make with your IRA funds? Then the Illinois Self Directed IRA LLC is your solution. In addition to the tremendous IRA benefits (tax-free gains, tax deductions, asset protection and estate planning), the Illinois Self Directed IRA LLC allows you to invest tax-free in investments that you know and understand quickly and without custodian consent.
By using an Illinois Self Directed IRA LLC with “checkbook control”, you will gain the following advantages:
You will no longer have to get each investment approved by the custodian of your account. Instead, as manager of the Illinois Self Directed IRA LLC, all decisions are truly yours. To make an investment, simply write a check and use the funds straight from your Illinois Self Directed IRA LLC bank account.
For example, Beth has established a Self-Directed IRA LLC. Beth’s Traditional IRA care of the custodian is the sole member of the LLC and Beth will be appointed as manager of the LLC. Beth has opened herself Directed IRA LLC bank account at a local bank in Illinois. The name of Beth’s Self-Directed IRA LLC is ABC LLC. Beth 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” Illinois Self Directed IRA LLC, Beth, 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. Beth, 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”, Beth would likely not be able to make the real estate purchase since seeking custodian approval would have likely taken too much time.
Related: What is a Self-Directed IRA?
With an Illinois Self-Directed IRA LLC, you will be able to invest in almost any type of investment opportunity that you discover, including Real Estate in or outside the State of Illinois (rentals, foreclosures, raw land, tax liens etc.), Private Businesses, Precious Metals, Hard Money & Peer to Peer Lending as well as stock and mutual funds; your only limit is your imagination. The income and gains from these investments will flow back into your IRA tax-free.
Low Custodian Fees
An Illinois Self-Directed IRA LLC “Checkbook Control” structure will help you save a significant amount of money on custodian fees. With a Self Directed IRA LLC with “checkbook control” you no longer have to pay excessive custodian fees based on account value and transaction fees as you would with a custodian controlled Self Directed IRA. Instead, with a “checkbook control” Self-Directed IRA LLC, an FDIC backed IRS approved passive custodian is used.
The custodian in the “checkbook control” Self Directed IRA LLC structure is referred to as a “passive” custodian largely because the custodian is not required to approve any IRA related investment and simply serves the role of satisfying IRS regulations. By using a Self Directed 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 Passive Custodian, the Passive Custodian will immediately transfer your funds to your new Illinois Self Directed IRA LLC bank account where you as manager of the LLC will have “Checkbook Control” over those funds.
Investments Made Quickly
With an Illinois Self-Directed IRA LLC “Checkbook Control” structure, you, as manager of the IRA LLC, will have the power to act quickly on a potential investment opportunity. When you find an investment that you want to make with your IRA funds, as manager of the LLC, simply write a check or wire the funds straight from your Illinois Self Directed IRA LLC bank account to make the investment. The Self Directed 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 Income & Gains
With an Illinois Self Directed IRA LLC “Checkbook Control” structure, all income and gains from IRA investments will generally flow back to your IRA LLC tax-free. Because an LLC is treated as a pass-through entity for federal income tax purposes and the 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!
Limited Liability Protection
The State of Illinois has enacted a statute that provides for the creation and governance of LLCs. In addition, The State of Illinois allows an IRA to be a member/owner of an LLC.
By using an Illinois Self-Directed IRA LLC with “Checkbook Control”, your IRA will benefit from the limited liability protection afforded by using an Illinois LLC. By using an Illinois LLC, all your IRA assets held outside the LLC will be shielded from attack. This is especially important in the case of IRA real estate investments where many state statutes, including Illinois 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 an Illinois Self-Directed IRA LLC with “Checkbook Control”, the IRA holder’s IRA will be protected for up to $1 million in the case of personal bankruptcy. In addition, the State of Illinois shields Traditional IRAs, but not Roth IRAs from creditors attack against the IRA holder outside of bankruptcy. Therefore, by using an Illinois Self-Directed IRA LLC, a Traditional IRA but not a Roth IRA will be generally protected against creditor attack against the IRA holder.