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IRA Financial Blog

Texas Self-Directed IRA

texas self-directed IRA

A Texas Self-Directed IRA LLC with “Checkbook Control” lets you use your retirement funds to make almost any type of investment without the consent of a custodian. Therefore, if there is an investment opportunity in Texas such as real estate that you want to buy with your IRA funds, the Texas Self Directed IRA LLC is your solution. Not only will you receive several benefits, such as tax-free gains and tax deductions, the Texas Self-Directed IRA LLC allows you to make tax-free investments that you understand more than Wall Street without custodian consent.

When you use a Texas Self-Directed IRA LLC with “checkbook control”, you gain the following advantages:

“Checkbook Control”

The Self-Directed IRA LLC structure lets you make investments on your own. You will act as manager of the Texas Self-Directed IRA LLC, therefore, all decisions are truly yours. If you wish to make an investment, just write a check or wire funds from the Texas Self-Directed IRA LLC bank account.

For example, if you establish a Self-Directed IRA LLC, the traditional IRA, care of the custodian, is the sole member of the LLC. You will become manager of the LLC and you can open your IRA LLC bank account at any Texas bank. The Self-Directed IRA LLC is named ABC LLC, and you want to use it to purchase real estate from Billy, an unrelated third-party (non-disqualified person). Billy wants to close the transaction as quickly as possible, and with the checkbook control structure, you can act fast by writing a check from the ABC LLC bank account to Billy. Whereas, a custodian control Self-Directed IRA would take too long to complete the process, and you would likely lose the investment.

Investment Opportunities

A Texas Self-Directed IRA LLC diversifies your retirement portfolio by allowing you to invest in almost any type of investment. Traditional IRAs established by a traditional financial institution limit investors to traditional assets, like stocks, bonds, mutual funds and ETFs. With a Self-Directed IRA LLC, you can purchase traditional assets as well as non-traditional (alternative assets) investments, such as:

  • Real Estate in or outside the State of Texas (rentals, foreclosures, raw land, tax liens etc.)
  • Private Businesses
  • Precious Metals
  • Hard Money & Peer to Peer Lending
  • Traditional assets such as stocks and mutual funds

The income and gains from these investments will flow back into your IRA tax-free.

Low Custodian Fees

You can save significantly on custodian fees by establishing a Texas Self-Directed IRA LLC checkbook control structure. You will use an FDIC backed and IRS approved passive custodian. The custodian in the checkbook control structure is called “passive” because the custodian does not approve any IRA related investments. It is there to satisfy IRS regulations. Enjoy the benefits of the Self-Directed IRA minus the delays and high fees of the account custodian.

IRA Financial Group works with FDIC backed and IRS approved passive custodians. Once you notify your custodian to transfer your retirement funds over to the passive custodian, the passive custodian will transfer these funds to the Texas Self-Directed IRA LLC bank account. You will then gain checkbook control over your funds, and the power to invest in what you want, when you want.

Investments Made Quickly

Again, because you are manager of the Texas Self-Directed IRA LLC “Checkbook Control” structure, you can act quickly on investment opportunities. By eliminating the delays of a custodian, you can act fast when the opportunity presents itself.

Tax-Free Income & Gains

An LLC is treated as a pass-through entity for federal income tax purposes. The IRA is not pursuant to tax under IRC section 408 because it is a member of the LLC. As a result, all income and gains flow back to the IRA tax-free.

Limited Liability Protection

In Texas, an IRA can be a member or owner of an LLC. A Texas

The State of Texas has enacted a statute that provides for the creation and governance of LLCs. In addition, The State of Texas allows an IRA to be a member/owner of an LLC.

By using a Texas Self-Directed IRA LLC with “Checkbook Control”, your IRA will benefit from the limited liability protection afforded by using a Texas LLC. By using a Texas 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 Texas impose an extended statute of limitation for claims arising from defects in the design or construction of improvements to real estate.

Asset & Creditor Protection

With a Texas Self-Directed IRA LLC checkbook control structure, your retirement account will be protected for up to $1 million if you enter into personal bankruptcy. Additionally, traditional IRAs and Roth IRAs in Texas will be shielded from creditor attacks to your IRA outside of bankruptcy.


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