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What is a Self-Directed Roth IRA LLC?

Self-Directed Roth IRA

The Relief Act of 1997 introduced the Roth IRA. A Roth IRA is an after-tax IRA that allows any person in the United States with earned income under a set income threshold (Under $144,000 if single and $214,000 if married and filing jointly) to make after-tax contributions up to $6,000 or $7,000 if over the age of 50 for 2022. Unlike a pretax traditional IRA, Roth IRA contributions are not tax-deductible. So long as the Roth IRA owner is above the age of 59 1/2 and the Roth IRA has been open for at least 5 years, all Roth IRA distributions would be tax-free. Also, with a Roth IRA, there are no required minimum distributions (RMDs) at age 72 like a pretax traditional IRA. In other words, if you invested any capital asset, such as stocks, real estate, and even cryptos, all gains would be tax-free, and you would be able to pull money out of the Roth IRA tax-free if you are over the age of 59 1/2 and the Roth has been opened at least 5 years.

A self-directed Roth IRA is not a specifically designated legal or IRS term you will you will find in the Internal Revenue Code. In essence, a self-directed Roth IRA is a Roth IRA account in which the IRA provider allows the IRS to be invested in alternative assets, such as real estate.  A self-directed Roth IRA follows the same rules as the Roth IRA.  The sole distinction is that a self-directed Roth IRA can invest in more than just equities, which are solely offered by traditional financial institutions and banks.

The self-directed Roth IRA LLC, also known as the checkbook control or self-directed Roth IRA with checkbook control, has rapidly become the most popular vehicle for retirement account investors seeking to buy real estate or other alternative assets.  Under the checkbook Roth IRA format, a limited liability company (“LLC”) is created which is funded and owned by the Roth IRA and managed by the Roth IRA holder.

How to Open a Self-Directed Roth IRA LLC

Opening a Self-Directed Roth IRA LLC is now easier and more cost efficient than ever.

Step 1: Establish a Roth IRA with IRA Financial.

  1. Go to IRA Financial Group and click – Get started
  2. New Client?  click “Sign up” and complete the requested sections before clicking on Create an account
  3. Click on Open an account and choose self-directed IRA LLC
  4. Enter in your personal information and upload the front and back of a government issued picture ID

Step 2: Transfer or rollover your retirement funds to IRA Financial tax-free.  IRA Financial will take care of transferring your existing Roth IRA funds to IRA Financial tax-free

Step 3: IRA Financial will establish your Roth IRA LLC.  If purchasing real estate, we suggest establishing the LLC in the state where the real estate will be located.  However, if you will be investing in non-real estate assets, such as a private business or cryptos, then technically the LLC can be established in any state.  IRA financial will also draft and customize the LLC operating agreement showing the Roth IRA as owner of the LLC and the Roth IRA owner as manager of the LLC.  We will also acquire an employer identification number for your Roth IRA LLC and can even open a bank account for no fee with Capital One Bank.

Step 4: Funding the Roth IRA LLC.  At the client’s direction, IRA Financial will fund the LLC with Roth funds. Client will then be ready to make the self-directed Roth IRA LLC investment.  The investment will be titled in the name of the LLC.

When Can I Make Investments with my Self-Directed Roth IRA LLC

  1. The application will go into a queue to be reviewed. A new account specialist will call you within 1-2 business days if items are missing, filled out incorrectly, or need further follow up.
  2. Once the application is complete and correct, an account number will be assigned within 1-2 additional business days. The account number will be emailed to you by [email protected].
  3. The transfer form will be submitted to the Transfer Department, or instructions to complete a Rollover or contribution will be emailed to you with your account number.
  4. Once we receive the funds they will be ready for investment
  5. An investment authorization form is to be completed and required investment documentation must be provided/uploaded so that IRA Financial can fund the investment, within 24-72 hours, the funds will be sent for investment or the Roth IRA LLC.

Work with the Self-Directed Roth IRA Experts

IRA Financial Group will take care of the entire setup of your Self-Directed Roth IRA LLC “Checkbook Control” structure. The whole process can be handled by phone, email, fax, or mail and typically takes between 7-21 days to complete, the timing largely depending on the state of formation and the custodian holding your retirement funds.

Our IRA experts and tax and ERISA professionals are onsite greatly reducing the setup time and cost. Most importantly, each client of the IRA Financial Group is assigned a retirement tax professionals to help with the establishment of the Self-Directed Roth IRA LLC “Checkbook Control” structure. You will find that our fee for this service is significantly less than other companies that perform the same or similar services.


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