Self-Directed IRA​ LLC

The Self-Directed IRA LLC is a retirement account vehicle that is best known for allowing investors to use retirement funds to buy alternative assets, such as real estate.

The Self-Directed IRA LLC

“Self-Directed IRA” is not a term of art, and you will not find it anywhere in the Internal Revenue Code (IRC). It simply refers to an IRA account which is permitted to be invested in traditional assets, such as stocks, but also alternative assets, such as real estate, gold, precious metals, cryptocurrencies, and more. One major advantage of investing in alternative assets with a Self-Directed IRA is that all income and gains are tax-deferred until the time when the IRA holder (you) takes a distribution.

What is a Self-Directed IRA LLC?​

The Self-Directed IRA LLC with “checkbook control” has become the most popular vehicle for investors looking to make investments  that require a high frequency of transactions (think rental real estate). Under the “Checkbook IRA” format, a limited liability company (LLC) is created which is then funded and owned by the IRA and managed by the IRA holder.

The “checkbook control” Self-Directed IRA allows one to eliminate costs and delays often associated with using a full-service IRA custodian. This option allows the investor to act quickly when the right investment opportunity presents itself cost effectively and without delay.

Setting up a Checkbook IRA with IRA Financial

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1. Transfer your funds to a passive custodian tax free

Your retirement funds are transferred from your custodian to a passive custodian like IRA Financial.

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How it Works

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2. Establish an LLC and transfer your funds into its new bank account

You can serve as a manager of your established LLC. IRA Financial opens your bank account hassle free at Capital One, then transfers your retirement fund into that new account.​

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3. Get checkbook control and start investing in alternative assets

As a manager, you have checkbook control and can direct the LLC to invest in real estate, tax liens, private business, metals, cryptocurrencies and more.

Benefits of a Self-Directed IRA LLC​

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Is the Self-Directed IRA LLC Right for Me?

For one-off investments or investments with long holding periods, such as hedge funds & other investment funds, then a custodian controlled Self-Directed IRA may make sense since there is no LLC establishment fee. For high frequency of transactions or transactions involving a high volume of activity, such as rental real estate, house flipping, or hard money loans, the checkbook control Self-Directed IRA LLC may be your best solution.
In addition, if you are interested in investing in cryptocurrencies, other than Bitcoin, Ethereum, Litecoin, and other more popular coins available on Bitstamp, the use of a Self-Directed IRA LLC will be needed in order to link the IRA LLC account to a different crypto exchange, such as Coinbase, Kraken and Binance.

In general, if you are looking for limited liability protection, ultimate control, and/or privacy, the Self-Directed IRA LLC would be a smart choice!

Self-Directed IRA LLC Investments

A Self Directed IRA LLC offers one the ability to use his or her retirement funds to make almost any type of investment on their own without requiring the consent of any custodian or person. In fact. the IRS only describes the type of investments that are prohibited, which are very few.
The IRS and the Internal Revenue Code do not describe what a self-directed IRA can invest in, only what it cannot invest in. Internal Revenue Code Sections 408 & 4975 prohibits Disqualified Persons from engaging in certain type of transactions, such as life insurance, collectibles, or any transaction directly or indirectly involving or benefiting a “disqualified person.”  A “disqualified person” is essentially defined as the IRA holder and any of his or her lineal ascendants and descendants, as well as any entities controlled by such persons.

Self-Directed IRA LLC Investments

The following are some of the more common of types of investments that can be made with your Self-Directed IRA LLC:
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