An IRA LLC comes with the numerous benefits when compared with the services of a custodian that you need to hire for handling your investments. With an IRA LLC, you get a complete control over your investments wherein you have numerous exciting options, such as non-recourse loans for investing in the real estate. Actually, a self directed IRA owns the shares of a limited liability company (LLC), and this makes it possible for you to successfully route your transactions through it instead of routing it through an IRA. In a self directed IRA LLC, you get complete control over your finances, and you can make any investment in a quickest possible way as compared to a custodian.
Some of the benefits of an IRA LLC are:
- You can make investment in the real estate using a non-recourse loan. In case of a custodian, it will be cumbersome to do the non-traditional investments. An IRA LLC actually allows you to diversify and then enjoy the benefits of the returns during your retirement years.
- When you buy some property using the non-recourse financing and then sell the same for the profits, you can complete the entire process through your LLC. All the profits cornered by you are tax-deferred through the self directed Roth IRA. There is no need for you to route through 1031 exchanges, since your individual retirement account is already a tax-deferred account.
- When the ownership of an IRA LLC is with you, you are in complete control of the finances. You will not be dealing in any way with the custodian who can otherwise question your investment decisions.
- With an IRA LLC, you can use funding from non-recourse loans or even the LLC funds for purchasing a real estate.
- You save considerable amount of money in the custodian fees when you are acting as a manager of your LLC. You just have to pay small annual charges to a custodian.
- Just like the traditional IRA, you not only have numerous tax advantages with the self directed IRA LLC but also various tax-free gains and a tax-deferred income. This becomes possible because all the income earned by you goes straight into the IRA and then becomes tax-free, thereby allowing you to make profits without paying any immediate taxes as they will be paid only on the withdrawal at some later date.
- With an IRA LLC, you can make investment in the business, tax liens, property, rare metals and much more that is permitted and is not on the prohibited list. The income so generated is totally tax free for a Roth IRA. In case of a traditional IRA, it is tax deferred. You can build a diverse portfolio that can provide you excellent returns without any risks.