Nov 29

The Self-Directed IRA LLC Advantage

Find out the facts about Checkbook Control IRA Tax Advantages: With the Self-Directed IRA LLC, you have all the tax advantages of traditional IRAs, as well as tax deferral and tax-free gains. All income and gains generated by your IRA investment will flow back to your IRA tax-free. By using a Self-Directed IRA to make investments, the IRA owner is able to defer taxes on any investment returns, thus, allowing the IRA owner to benefit from tax-free growth. Instead of paying tax on the Self-Directed IRA returns of an investment, tax is paid only at a later date when a distribution is taken, leaving the investment to grow tax-free without interruption.

Investment Options: With the Self-Directed IRA LLC, you can invest in almost any type of investment, including real estate, private business entities, tax liens, precious metals and commercial paper tax-free!

Diversification: With the Self-Directed IRA LLC, you can invest in almost any type of investment, including real estate, allowing you to diversify and better protect your retirement portfolio.

“Checkbook Control”: With a Self-Directed IRA LLC, you have even more advantages, including what’s called “Checkbook Control.” As manager of the Self-Directed IRA LLC you will have the ability to make IRA investments without seeking the consent of a custodian. Instead, all decisions are truly yours.

Access: With a Self-Directed IRA LLC, you will have direct access to your IRA funds allowing you to make an investment quickly and efficiently. There is no need to obtain approvals from your custodian or deal with time delays in awaiting approval from your custodian or pay any review fees.

Speed: With a Self-Directed IRA LLC, when you find an investment that you want to make with your IRA funds, simply write a check or wire the funds straight from your Self-Directed IRA LLC bank account to make the investment. The Self-Directed IRA LLC allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

Lower fees: Another advantage to a Self-Directed IRA LLC account is that you can save a lot of money on custodian fees. With the “checkbook control” Self-Directed IRA LLC structure, you will not be required to seek custodian investments when making IRA investments allowing you to eliminate custodian transaction fees and account valuation fees.

Limited Liability: By using a Self-Directed IRA LLC with “Checkbook Control”, your IRA will benefit from the limited liability protection afforded by using an LLC. By using an LLC, all your IRA assets held outside the LLC will be shielded from attack. This is especially important in the case of IRA real estate investments where many state statutes impose an extended statute of limitation for claims arising from defects in the design or construction of improvements to real estate.

Asset & Creditor Protection: By using a Self-Directed IRA LLC with “Checkbook Control”, the IRA holder’s IRA will be protected for up to $1 million in the case of personal bankruptcy. In addition, most states will shield a Self-Directed IRA from creditors’ attack against the IRA holder outside of bankruptcy. Therefore, by using a Self-Directed IRA LLC, the IRA will be generally protected against creditor attack against the IRA holder.

Self-Directed IRA LLC Structure

To view a diagram of the Self-Directed IRA LLC structure, please select the image below.

Self Directed IRA LLC

For more information about the Self-Directed IRA LLC, please contact us @ 800.472.0646.

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Dec 24

Is the Self-Directed IRA LLC “Checkbook Control” Structure Legal?

There is really no question today whether the self-directed IRA LLC “checkbook control” solution is legal.  On October 2013, the Tax Court in T.L. Ellis, TC Memo. 2013-245, Dec. 59,674(M) (“TC Memo 2013-245”) held that establishing a special purpose limited liability company (“LLC”) to make an investment did not trigger a prohibited transaction, as a newly established LLC cannot be deemed a disqualified person pursuant to Internal Revenue Code Section 4975.  Ellis was the first case that specifically addressed the use of a special purpose LLC wholly owned by an IRA and managed by the IRA holder to make investments.  The Swanson Case and 2001 IRS Advisory opinion are important, but did not deal specifically with the LLC as the special purpose entity making the IRA investment.  It is clear from the Ellis case that using a newly established LLC wholly owned by an IRA to make investments will not trigger a prohibited transaction.  The IRS is more concerned about the ultimate investment then whether an LLC was used or not to make the investment (see Ellis case – http://www.irafinancialgroup.com/selflaw.php).

Self-Directed IRA LLC with "checkbook control" is IRS Approved

Self-Directed IRA LLC with “checkbook control” is IRS Approved

In addition, below please find a link that describes the legality of the self-directed IRA LLC “checkbook control” structure in greater detail:

http://checkbookirafacts.com/checkbook-ira-facts.pdf

The self-directed IRA LLC “checkbook control” structure is essentially a structure that uses a special purpose entity (LLC) as a means for allowing the IRA investor to make IRA investments quicker and with lower annual fees.

If you would like to learn more about the legality of the self-directed IRA LLC “checkbook control” structure, please contact a retirement tax specialist at 800-472-0646

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May 06

The Advantages of Having Checkbook Control of Your IRA

What Is Checkbook Control?

Find out the facts about Checkbook Control IRAA Self-Directed IRA LLC with “Checkbook Control” plan is an IRS and tax court approved structure that will allow you to use your IRA funds to make almost any type of investment, including real estate, tax liens, precious metals, foreign currency and much more tax free!

With a “checkbook control” Self Directed IRA LLC you will never have to seek the consent of a custodian to make an investment or be subject to excessive custodian account fees based on account value and per transaction.

To establish the Self-Directed IRA LLC “Checkbook Control” structure, a limited liability company (“LLC”) is established that is owned by the IRA and managed by the IRA account owner (you). The IRA owner’s funds are then transferred by the passive custodian to the new IRA LLC bank account. As the manager of the IRA LLC, the IRA owner will have the authority to make investment decisions on behalf of the IRA providing the IRA owner with “checkbook control” over his or her IRA funds.

When you find an investment that you want to make with your IRA funds, simply write a check or wire the funds straight from your Self Directed IRA LLC bank account to make the investment. The Self Directed IRA LLC with “checkbook control” allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

A Self-Directed IRA LLC with “Checkbook Control” Offers Investment Alternatives

With a Self-Directed IRA LLC with “checkbook control,” you will have the ability to invest in almost any type of investment, including real Self Directed IRA LLC With Checkbook Controlestate, private business entities, tax liens, foreign currency, and commercial paper tax-free! Unlike a traditional IRA custodian, such as Vanguard or Fidelity, which only allows IRA investments into stock or mutual funds, a Self-Directed IRA LLC with “checkbook control” will allow you to make non-traditional types of investments with your IRA funds, such as real estate and precious metals. The almost unlimited investment opportunities presented by a Self-Directed IRA LLC will allow you to diversify and better protect your retirement portfolio.

Below is a partial list of allowable investments:

  • Residential or commercial real estate
  • Raw land
  • Foreclosure property
  • Mortgages
  • Mortgage pools
  • Deeds
  • Private loans
  • Tax liens
  • Private businesses
  • Limited Liability Companies
  • Limited Liability Partnerships
  • Private placements
  • Gold
  • stocks, bonds, mutual funds
  • Most currencies

A Self-Directed IRA LLC Eliminates or Reduces Custodian Costs

With a Self-Directed IRA LLC with “Checkbook Control”, you, as manager of the IRA LLC, can act quickly on a great investment opportunity. With a Self-Directed IRA LLC, when you find an investment that you want to make with your IRA funds, simply write a check or wire the funds straight from your Self-Directed IRA LLC bank account to make the investment. The Self-Directed IRA LLC allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

Gaining “Checkbook Control” is Quick & Easy

The IRA Financial Group will take care of setting up your entire Self Directed 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 in-house tax and ERISA professionals are on site greatly reducing the set-up time and cost. Most importantly, each client of the IRA Financial Group is assigned a retirement tax professional to help with the establishment of the Self-Directed 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.

The Self-Directed IRA LLC “Checkbook Control” Process

STEP 1: A Self-Directed IRA account is established with an IRS approved and FDIC backed passive custodian.

STEP 2: Retirement funds are transferred to the new Self-Directed IRA account tax-free!

STEP 3: A Limited Liability Company (LLC) is formed with the IRA account owner designated as Manager and the IRA as owner (member) of the LLC.

STEP 4: At the direction of the IRA owner, the passive custodian invests the IRA funds into the newly formed IRA LLC. One or more IRAs can be used to fund the IRA, including Traditional, Roth, and SEP IRAs.

STEP 5: The Manager of the new IRA LLC (the IRA owner) directs all, or a portion, of the IRA funds held in the new LLC bank account for investment.

STEP 6: The LLC makes an investment using IRA funds and all income and gains generally flow back to the LLC tax-free!

Get Started with your “Checkbook Control” Self-Directed IRA LLC today!  Contact an IRA expert with the IRA Financial Group @ 800.472.0646 today!

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Apr 23

The Facts About the Checkbook IRA

A Self-Directed IRA LLC with “Checkbook Control” plan is an IRS and tax court approved structure that will allow you to use your IRA funds to make almost any type of investment, including real estate, tax liens, precious metals, foreign currency and much more tax free!

With a “checkbook control” Self Directed IRA LLC you will never have to seek the consent of a custodian to make an investment or be subject to excessive custodian account fees based on account value and per transaction.

To establish the Self-Directed IRA LLC “Checkbook Control” structure, a limited liability company (“LLC”) is established that is owned by the Self Directed IRA LLC With Checkbook ControlIRA and managed by the IRA account owner (you). The IRA owner’s funds are then transferred by the passive custodian to the new IRA LLC bank account. As the manager of the IRA LLC, the IRA owner will have the authority to make investment decisions on behalf of the IRA providing the IRA owner with “checkbook control” over his or her IRA funds.

With a “checkbook control” Self Directed IRA LLC you will never have to seek the consent of a custodian to make an investment or be subject to excessive custodian account fees based on account value and per transaction.

By having “checkbook control” over your IRA funds you will gain the following advantages:

Investment Opportunities: A Self-Directed IRA LLC with “Checkbook Control” will allow you to invest in almost any type of investment opportunity that you discover, including: Real Estate (rentals, foreclosures, raw land, tax liens etc.), private businesses, precious metals, foreign currency, stock options, hard money & peer to peer lending; you’re only limit is your imagination.  Of course, you can still make traditional investments, such as stock and mutual fund investments, as you did with a regular IRA. The income from these IRA investments will flow back into your IRA tax-free.

“Control”: With a Self-Directed IRA LLC, you will no longer have to get each investment approved by the custodian of your account. Instead, as manager of the Self-Directed IRA LLC, all IRA investment decisions are truly yours. To make an investment, simply write a check or wire funds straight from your Self Directed IRA LLC bank account.

Example 1: Joe has a Self-Directed IRA LLC set-up by the IRA Financial Group. Joe has established his Self Directed IRA LLC bank account with Bank of America. The name of Joe’s LLC is Joe Smith IRA LLC. Joe wishes to use his IRA funds to purchase a home from Steve, an unrelated third-party (non-disqualified person). Steve is anxious to close the transaction as soon as possible. With a “checkbook control” Self-Directed IRA LLC, Joe can simply write a check using the funds from his IRA LLC account or can wire the funds directly from the account to Steve. Joe, as manager of the LLC, no longer is required to seek the consent of the IRA custodian before making the real estate purchase. In contrast, with a regular Self- Directed IRA without “checkbook control” Joe may not be able to make the real estate purchase since seeking custodian approval would likely take too much time.

Example 2: Joe has a Self0Directed IRA LLC set-up by the IRA Financial Group. Joe has established his Self Directed IRA LLC bank account with Bank of America. The name of Joe’s LLC is Joe Smith IRA LLC. Joe wishes to use his IRA funds to invest in tax lien certificates via auction. Purchasing tax lien certificates requires Joe to make the tax lien payment at the auction. With a “checkbook control” Self-Directed IRA LLC, Joe can simply bring his LLC checkbook to the auction or secure a certified check from the bank in order to make payments at the auction. In contrast, with a regular Self-Directed IRA without “checkbook control” Joe would not be able to make tax lien certificate investments because he would need IRA custodian approval before each tax lien certificate purchase and would not have sufficient time to seek the consent of the custodian.

Lower Custodian Fees: With a Self-Directed IRA LLC with “checkbook control” you can save a lot of money on IRA custodian fees. With a Self-Directed IRA LLC with “checkbook control” you no longer have to pay excessive custodian fees based on account value and transaction fees. Instead, with a “checkbook control” Self-Directed IRA LLC, an FDIC backed IRS approved passive custodian is used. The custodian in the “checkbook control” Self Directed IRA LLC structure is referred to as a “passive” custodian largely because the custodian is not required to approve any IRA related investment and simply serves the role of satisfying IRS regulations. By using a Self Directed IRA LLC with “checkbook control” you can take advantage of all the benefits of self-directing your retirement assets without incurring excessive custodian fees and custodian created delays since you as manager of the IRA LLC have “checkbook control” over your IRA funds (“checkbook control”).

See how much you can save in custodian fees with a Self Directed IRA LLC Structure:

Self Directed IRA Custodian
Checkbook Control
Annual Fees – Assuming $100,000 IRA Value and 2 Transactions per year
Equity Trust
No
Approximately $640 per year – Fees may increase based on increase in value of investment(s)
Entrust

No

Approximately $765 per year – Fees may increase based on increase in value of investment(s)
Pensco Trust
No
Approximately $675 per year – Fees may increase based on increase in value of investment(s)
IRA Services

Yes

$180 flat fee for Year 1
$115 flat fee for Year 2+
Sunwest Trust
Yes
$275 flat fee for Year 1
$225 flat fee for Year 2+

Below are a number of examples that demonstrate the financial savings one can enjoy using a “checkbook control” Self Directed IRA LLC versus a Self Directed IRA without “checkbook control.

Example 1: Jim, who resides in Missouri, wants to use his retirement funds to invest in real estate and is debating between using a “checkbook control” Self Directed IRA LLC and a Self Directed IRA without “checkbook control”.

If Jim selected Equity Trust as the custodian, Jim would be paying approximately $640 each year for a custodian plus will require custodian approval to purchase or sell a real estate investment. Over a 4 year period, Jim would pay approximately $2560 to Equity Trust for custodian services.

Alternatively, if Jim elected to use the IRA Financial Group’s Self Directed IRA LLC “checkbook control” structure, Jim would pay approximately $1400 in year 1. However, for every year thereafter Jim would only be required to pay approximately $105 per year for maintenance of the “checkbook control” structure. Thus, over a 4 year period, Jim would be required to pay approximately $1715, a saving of $845 or a savings of approximately 33%.

Example 2: Beth, who resides in Michigan, wants to use her retirement funds to invest in precious metals and is debating between using a “checkbook control” Self Directed IRA LLC and a Self Directed IRA without “checkbook control”.

If Beth selected Entrust as the custodian, Beth would be paying approximately $765 each year for a custodian plus will require custodian approval to purchase or sell precious metals. In addition, Beth would have to pay approximately $250 a year for depository services to store the metals. Over a 3-year period, Beth would pay approximately $3045 to Entrust for custodian services.

Alternatively, if Beth elected to use the IRA Financial Group’s Self Directed IRA LLC “checkbook control” structure, Beth would pay approximately $1400 in year 1. However, for every year thereafter would only be required to pay approximately $105 per year for maintenance of the “checkbook control” structure. Thus, over a 3 year period, Beth would be required to pay approximately $1700, a saving of $1345 or a savings of approximately 44%.

Example 3: Dan, who resides in Kentucky, wants to use his retirement funds to invest in real estate and is debating between using a “checkbook control” Self Directed IRA LLC with the IRA Financial Group and a Self Directed IRA without “checkbook control”.

If Dan selected Pensco Trust as the custodian, Dan would be paying approximately $675 each year for a custodian plus will require custodian approval to purchase or sell a real estate investment. Over a 5 year period, Dan would pay approximately $3375 to Pensco Trust for custodian services.

Alternatively, if Dan elected to use the IRA Financial Group’s Self Directed IRA LLC “checkbook control” structure, Dan would pay approximately $1400 in year 1. However, for every year thereafter Dan would only be required to pay approximately $105 per year for maintenance of the “checkbook control” structure. Thus, over a 5 year period, Jim would be required to pay approximately $1820, a saving of $1555 or a savings of approximately 46%.

Example 4: Lisa, who resides in Iowa, wants to use her retirement funds to invest in tax liens and is debating between using a “checkbook control” Self Directed IRA LLC and a Self Directed IRA without “checkbook control”.

If Lisa selected Entrust as the custodian, Lisa would be paying approximately $765 each year for a custodian plus will require custodian approval to make each tax lien purchase. Over a 7-year period, Lisa would pay approximately $5300 to Entrust for custodian services.

Alternatively, if Lisa elected to use the IRA Financial Group’s Self Directed IRA LLC “checkbook control” structure, Lisa would pay approximately $1400 in year 1. However, for every year thereafter would only be required to pay approximately $105 per year for maintenance of the “checkbook control” structure. Thus, over a 7-year period, Lisa would be required to pay approximately $2030, a saving of $3270 or a savings of approximately 62%.

Speed: With a Self-Directed IRA LLC with “Checkbook Control”, you, as manager of the IRA LLC, can act quickly on a great investment opportunity. With a Self-Directed IRA LLC, when you find an investment that you want to make with your IRA funds, simply write a check or wire the funds straight from your Self-Directed IRA LLC bank account to make the investment. The Self-Directed IRA LLC allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

Diversification: With a Self-Directed IRA LLC, you can invest in almost any type of investment, including real estate, allowing you to diversify and better protect your retirement portfolio.

Access: With a Self-Directed IRA LLC with “checkbook control”, you, as manager of the IRA LLC, will have direct access to your IRA funds allowing you to make an investment quickly and efficiently. There is no need to obtain approvals from your custodian, or deal with time delays in awaiting approval from your custodian or paying any review fees. Instead making an IRA investment is as simple as writing a check or wiring funds directly from your IRA LLC checking account.

The IRA Financial Group will take care of setting up your entire Self Directed 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 on site greatly reducing the set-up time and cost. Most importantly, each client of the IRA Financial Group is assigned a tax professional to help with the establishment of the Self-Directed 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.

To learn more about the Self-Directed IRA LLC with “checkbook control”, please contact one of our IRA expert @ 800.472.0646 or check out this website.

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