A Tennessee Self-Directed IRA LLC with “Checkbook Control” gives you, as an investor, the ability to use retirement funds to make almost any type of investment. You will not be limited to stocks, bonds, ETFs and other traditional investments pushed onto you by Wall Street. You can make any IRS approved alternative asset investment, including precious metals, tax liens and even cryptocurrency. The Self-Directed IRA gives you the flexibility to make any investment free of custodian consent.
Other advantages of using the Tennessee Self-Directed IRA LLC checkbook control structure include:
You don’t need every investment approved by the custodian of your account with checkbook control. All decisions are truly yours. When you want to make an investment, write a check or wire funds from the Self-Directed IRA LLC bank account.
Let’s assume you establish a Tennessee Self-Directed IRA LLC. Your traditional IRA, care of the custodian, will be the sole member of the LLC and you will be appointed as manager of the LLC. You can open the bank account at any bank, so you open it at a local Tennessee bank. The name of the Self-Directed IRA LLC is ABC LLC. You want to use your retirement funds to purchase real estate from Mike, an unrelated third-party, therefor not a disqualified person. Mike wants to close the transaction quickly. As manager of the LLC, you simply need to write a check or transfer funds to Jack directly from your Tennessee Self-Directed IRA LLC bank account.
Consider if you used a checkbook control Self-Directed IRA. You would likely lose the investment opportunity due to custodian delays.
A Tennessee Self-Directed IRA LLC allows you to invest in almost any type of investment opportunity that you discover, including:
- Real Estate in or outside the State of Tennessee (rentals, foreclosures, raw land, tax liens etc.)
- Private Businesses
- Precious Metals
- Hard Money & Peer to Peer Lending
- Stock and mutual funds
All income and gains from these investments will flow back into your IRA tax-free.
Low Custodian Fees
You don’t need to spend an exorbitant amount on custodian fees with A Tennessee Self-Directed IRA LLC “Checkbook Control” structure. Because you have checkbook control over your investments, you don’t need to pay a custodian based on account value and transaction fees. Unlike a custodian controlled Self-Directed IRA, an FDIC backed and IRS approved passive custodian is used.
The custodian is referred to as “passive” largely because the custodian is there to satisfy IRS regulations. The custodian does not approve any IRA related investment, or offer advice. You can take advantage of the benefits of using a Self-Directed IRA LLC without custodian delays or fees.
We use FDIC backed and IRS approved passive custodians. When you direct your custodian to transfer your retirement funds to the new passive custodian of the Tennessee Self-Directed IRA LLC bank account, you will gain checkbook control over the funds.
Investments Made Quickly
With the Tennessee Self-Directed IRA LLC checkbook control structure, you have the power to act quickly on a lucrative investment opportunity. You can immediately act on investments by writing a check or wiring funds.
Tax-Free Income & Gains
When you establish a Tennessee Self-Directed IRA LLC “Checkbook Control” structure, all income and gains from IRA investments will typically go to your IRA LLC tax-free. An LLC is treated as a pass-through entity for federal income tax purposes which means that the IRA, as the member of the LLC, is a tax-exempt party pursuant to Internal Revenue Code Section 408. As a result, all income and gains of the LLC will flow-through to the IRA tax-free.
Limited Liability Protection
Tennessee enacted a statute that provides for the creation and governance of LLCs. Furthermore, Tennessee allows an IRA to be a member/owner of an LLC.
When you use a Tennessee Self-Directed IRA LLC with “Checkbook Control”, your IRA will benefit from the limited liability protection afforded by using a Tennessee LLC. The Tennessee LLC ensures that your IRA assets held outside of the LLC will be shielded from attack. This is important for IRA real estate investments where many state statutes, including Tennessee impose an extended statute of limitation for claims arising from defects in the design or construction of improvements to real estate.
Asset & Creditor Protection
When you use a Tennessee Self-Directed IRA LLC with checkbook control, you receive greater asset and creditor protection. Your IRA will be protected for up to $1 million if you file personal bankruptcy. Additionally, Tennessee protects traditional and Roth IRAs from creditor attack outside of bankruptcy.