![]() The LLC entity affords limited liability protection to the owner of the LLC. Using a LLC to hold assets provides protections not available through an IRA alone. Note: While an IRA LLC structure will cost more to implement than simply opening an account with a custodian, most investors with a diverse portfolio will find that over time, they can save a considerable amount by using the checkbook IRA model. Thus you are only charged a fee for holding the LLC and not for each investment held by the LLC. With a self-directed IRA LLC the IRA only owns one asset -the LLC. Without a LLC your investments are held by your IRA and the custodian will charge you a fee for each asset held and for each transaction you make. Eliminate Per Asset and Transaction FeesĬheckbook control has the ability to help you avoid the administrative and transaction fees that are typically associated with a self-directed IRA. This can be particularly helpful with investments that have time restraints, such as auctioned items to close an immediate purchase of real estate. You don’t have to fill out paperwork, rely on your administrator to fund a purchase, or wait for someone else to write a check—you can take care of it yourself. When you identify an investment that you want to purchase, you can just write a check or wire the funds. ![]() Advantages of Using a Self-directed IRA LLC Immediate Access to Your IRA Funds We do the rest through our IRA Village website automated process. If you have not done so already all you have to do is establish an account with a self-directed IRA custodian and then transfer funds to your Self-directed IRA. We do everything you need to establish the LLC. You must also have a LLC Operating Agreement drafted. You will then be in control of that checkbook, therefore gaining “checkbook control” over your self-directed IRA funds. You will be given a checkbook that is directly linked to that LLC account. Once the funds are in the LLC, you have complete control over the investments made and the management of the investments. You then transfer funds from your Self-directed IRA to the bank account of the LLC. Once you establish this new LLC, a business checking account will be set up in its name. In order to obtain “checkbook control,” you must first establish an LLC that is owned by your IRA. In fact, a copy of the LLC Operating Agreement will be required by the Custodian and also by the bank where you will have your LLC’s checking account. It is extremely important to have a properly prepared Operating Agreement to fit the needs of your LLC and meet the requirements of the Internal Revenue Service for a Self-Directed IRA LLC. In addition, since the LLC will be managed by a manager and not the member, the Operating Agreement would need to include special management provisions. In general, a self-directed IRA LLC Operating Agreement should include special tax provisions relating to “Investment Retirement Accounts” and “Prohibited Transactions” pursuant to Internal Revenue Code Sections 4. The standard or generic LLC Operating Agreement will not meet the requirements for your Self-Directed IRA LLC. It is extremely important that you create an Operating Agreement customized particularly for your Self Directed IRA LLC. The LLC Operating Agreement is the most important document for your Self-Directed IRA. It the primary document that is referred to when issues concerning the LLC need to be resolved. The LLC Operating Agreement is the legal document that governs the operation of your LLC and the rights, responsibilities, and obligations of the LLC Members. ![]() What Role Does an Operating Agreement Serve for a Self-Directed IRA You do not need to establish a LLC to get the benefits of a self-directed IRA, but most owners of Self-directed IRAs use them so that the owners do not have go through the IRA custodian to make investment decisions (see benefits of a LLC below). Checkbook control is the term used when the owner of the self-directed IRA has complete control over the funds in the IRA and all decision-making. ![]() With a LLC the investor eliminates the cost, time, and need for authorization when making investment decisions and purchases. Without a LLC the investor must go through the self-directed IRA custodian for prior approval and authorization to make investment purchases and decisions. What Role Does a Limited Liability Company Serve for a Self-Directed IRA?Ī Limited Liability Company (“LLC”) gives the investor “checkbook control” over investment decisions and purchases.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |