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IRA Financial Blog

Vermont Self-Directed IRA

vermont self-directed IRA

The Vermont Self-Directed IRA LLC with “Checkbook Control” enables you to use your retirement funds to make virtually any type of investment. This can be done on your own, without custodian consent. If you have an investment opportunity in Vermont, like a real estate property, you may benefit most from the Self-Directed IRA LLC.

By using a Vermont Self-Directed IRA LLC with “checkbook control”, you receive the following advantages:

“Checkbook Control”

With checkbook control, you no longer need approval by the account custodian. You will be manager of the Vermont Self-Directed IRA LLC, and as manager, you gain control over your investments. To make an investment, simply write a check or wire funds from your Vermont Self-Directed IRA LLC bank account. You can do this on the spot and without custodian consent.

Here’s an example behind the power of checkbook control: you establish a Self-Directed IRA LLC and your traditional IRA, care of the custodian, is the sole member of the LLC. You will be appointed as manager of the LLC. You can now open a bank account for your Self-Directed IRA LLC at any Vermont bank. The name of the Self-Directed structure is ABC LLC. You want to use your retirement funds to purchase a home from John, an unrelated third-party (non-disqualified person). John wants to quickly close the transaction, and with checkbook control, you can write a check or wire the funds to John from your Vermont Self-Directed IRA LLC bank account.

If you were to use a custodian controlled Self-Directed IRA, you would likely lose the investment due to custodian delays.

Investment Opportunities

A great advantage of the Vermont Self-Directed IRA LLC is retirement portfolio diversity. With a traditional IRA, you are limited to stocks, bonds, mutual funds and other traditional assets. You can continue to make traditional asset investments with a Self-directed IRA LLC, but you have the freedom to additionally invest in alternative assets you trust. With this structure, your investment opportunities include:

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

Low Custodian Fees

You will save more on custodian fees by establishing a Vermont Self-Directed IRA LLC with checkbook control. This structure eliminates custodian fees based on account value and transaction fees. You will use an FDIC backed, IRS approved passive custodian. The custodian is referred to as “passive” largely because this custodian serves the role of satisfying IRS regulations. The custodian does not sell investment products, give advice or approves any investments. Take advantage of the benefits of self-directing without delays are excessive fees.

The passive custodians that we work with are FDIC backed and IRS approved. When you direct your current custodian to transfer your retirement funds to the new Vermont Self-Directed IRA LLC bank account, you gain checkbook control over the funds.

Investments Made Quickly

With a Vermont 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 Vermont 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

The Vermont Self-Directed IRA LLC is a highly tax advantageous structure. All income and gains from your IRA investment return to your IRA LLC tax-free. The LLC is treated as a pass-through entity for federal income tax purposes. Therefore, the IRA, as member of the LLC, is a tax-exempt party pursuant to IRC code section 408. This is why all income and gains go into the IRA tax-free.

Limited Liability Protection

Vermont has enacted a statute that provides for the creation and governance of LLCs. In addition, The State of Vermont allows an IRA to be a member/owner of an LLC. When you use a Vermont Self-Directed IRA LLC with “Checkbook Control”, your IRA benefits from the limited liability protection given to a Vermont LLC. When you use a Vermont 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 Vermont 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 Vermont Self-Directed IRA LLC with checkbook control, your IRA will be protection for up to $1 million if you file for personal bankruptcy. Additionally, Vermont better protects Traditional and Roth IRAs from creditor attack outside of bankruptcy.


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