A West Virginia Self-Directed IRA LLC with “Checkbook Control” lets you use your retirement funds to make alternative asset investments, like real estate, without requiring the consent of a custodian. If you live in West Virginia and have a lucrative investment opportunity you want to make with your IRA funds, you will benefit from the West Virginia Self-Directed IRA LLC.
In addition to several IRA benefits, such as tax-free gains, tax deductions and asset protection, the West Virginia self-directed IRA LLC allows you to make investments you know and trust more than Wall Street. You will receive all of this flexibility and control without custodian consent.
By using a West Virginia Self Directed IRA LLC with “checkbook control”, you gain the following advantages:
The investments you make no longer need to be pre-approved by the custodian of your account. As manager of the West Virginia Self-Directed IRA LLC, you make all the decisions. When you want to make an investment, simply write a check and use the funds straight from your West Virginia Self Directed IRA LLC bank account.
For example, Steve has established a Self Directed IRA LLC. Steve’s Traditional IRA, care of the custodian, is the sole member of the LLC and Steve is the manager of the LLC. Steve has opened his Self Directed IRA LLC bank account at a local bank in West Virginia. The name of Steve’s Self-Directed IRA LLC is ABC LLC. Steve wishes to use his IRA funds to purchase a home from Mike, an unrelated third-party (non-disqualified person). Jack is anxious to close the transaction as soon as possible. Because Steve is the manager of the LLC, with checkbook control, he can write a check or wire funds from the ABC LLC bank to Jack.
Steve no longer needs custodian consent to make any purchase. On the other hand, a Self-Directed IRA without checkbook control would require the consent of a custodian. As a result, Steve may not get the investment because custodial approval takes too much time.
With a West Virginia Self-Directed IRA LLC, you will be able to invest in almost any type of investment opportunity that you discover. This includes all types of real estate in or outside the State of West Virginia (rentals, foreclosures, raw land, tax liens etc.), private businesses, precious metals, hard money & peer to peer lending. You also have the option of making traditional investments, like stock and mutual funds. The income and gains you receive from these investments will flow back into your IRA tax-free.
Low Custodian Fees
A West Virginia 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.
A Self-Directed IRA LLC structure with checkbook control has a “passive” custodian. The custodian is given this name primarily because it offers no investment advice or approval and simply satisfies IRS regulations. When you use a Self-Directed IRA LLC with “checkbook control” you receive all the benefits of self-directing your retirement assets without incurring excessive custodian fees and custodian delays.
At IRA Financial, we work with Passive Custodians that 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 West Virginia Self-Directed IRA LLC bank account. Again, you will act as manager of the LLC and will have “Checkbook Control” over those funds.
Investments Made Quickly
With a West Virginia Self-Directed 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 IRA funds, as manager of the LLC, simply write a check or wire the funds straight from your West Virginia 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 a West Virginia 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 West Virginia has enacted a statute that provides for the creation and governance of LLCs. In addition, The State of West Virginia allows an IRA to be a member/owner of an LLC.
By using a West Virginia Self-Directed IRA LLC with “Checkbook Control”, your IRA will benefit from the limited liability protection afforded by using a West Virginia LLC. By using a West Virginia 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 West Virginia 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 West Virginia 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 West Virginia shields Traditional IRA, but not Roth IRAs from creditors attack against the IRA holder outside of bankruptcy. Therefore, by using a West Virginia Self-Directed IRA LLC, a Traditional IRA, but not a Roth IRA will be generally protected against creditor attack against the IRA holder.