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What is the Definition of a Checkbook Control IRA?

What is the Definition of a Checkbook Control IRA?

Checkbook Control IRA

When you’re tired of investing your hard earned retirement funds in the stock market, or you want greater control over your retirement funds, look into a Self-Directed IRA with Checkbook Control. A self-directed IRA with checkbook control, also known as a Checkbook Control IRA, allows you to better diversify your retirement funds. How does it do this? It allows you to make traditional investments (stocks, mutual funds, bonds, etc.) as well as non-traditional investments. This includes real estate, cryptocurrency, tax liens, etc.. As a result, this also gives you more control over your IRA.

You can do all of this tax-free and without custodian consent. As you probably know, the majority of financial institutions do not permit investment in non-traditional investments, like real estate. Yet, the IRS allows this. The reason that traditional financial institutions, such as Vanguard and Chase don’t allow you to make alternative investments is purely economical. A bank doesn’t make money when you use your retirement funds to buy real estate.

You want to buy real estate, and other alternative investments with your retirement funds. An IRA with checkbook control is the investment vehicle of choice.

Establishing an LLC That You Manage

With a checkbook control IRA, a limited liability company (LLC) is typically established in the state where the investment will be made. The IRA owns the LLC and you, the IRA holder (or any third-party) can serve as the manager of the LLC.

Your retirement funds will be transferred to a new IRA custodian. This will allow you to make real estate investments and other alternative investments. The IRA custodian then transfers the IRA funds directly into the new IRA LLC bank account – completely tax-free. In contract to financial institutions, such as Vanguard, you can open the new IRA LLC at any local bank account or credit union. Because you are the manager the checkbook control IRA LLC, you have checkbook control over the IRA funds. This allows you to make any type of investment as easily as writing a check from your IRA LLC bank account.

Benefits of Checkbook Control

Once you make your investment, income and gains generally flow back to the Checkbook Control IRA tax-free. Likewise, all investment expenses that come with Checkbook Control IRA investment need to be paid using IRA funds. When you use this option to buy real estate or make other investments, it has a number of advantages. Including:

  1. Tax-deferral
  2. Diversification
  3. Protection against a falling U.S. dollar

Work directly with our in-house retirement tax professionals to set up your IRS compliant checkbook control IRA. Our retirement tax professionals have years of experience in this field and have worked at some of the largest law firms in the United States. When you become a client at IRA Financial Group, rest assured that you (and your retirement funds) are in safe hands.

Call us at 800-472-0646 and learn more about the benefits and tax advantages of establishing a real estate IRA.

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Posted in Self-Directed IRA