Many investors enjoy using an IRA-owned LLC simply to avoid the inconveniences of using a custodian. Account holders have direct access to their funds and don’t need anyone’s permission to make the investments of their choosing.
Of course, this also saves time. Time can be a major factor with non-traditional investments like cryptocurrency, where the value can change dramatically in mere minutes or even seconds. There are, of course, many more benefits to using an Self Directed IRA-owned LLC.
The Self Directed IRA-owned LLC is used for Checkbook Control. This means the IRA is the sole owner of the LLC and you, as the IRA owner, are the Manager of the LLC. The IRA owner directly controls their investments without oversight from a custodian.
The IRA-owned LLC is formed by filing a Certificate of Formation with the Secretary of State. Then an Operating Agreement is created designating the IRA as the owner and you as the Manager of the LLC.
The Self Directed IRA will officially “own” the LLC, but you will control it. The Operating Agreement is also required to have restrictions to ensure that certain prohibited transactions do not take place.
Many custodians don’t want you to know about Checkbook Control or the powers it gives the investors. In the often complicated world of retirement funding, it’s no surprise that there are some amazing ways to invest for your golden years that most people are not aware of.
This is particularly true of the lesser-known, but extremely powerful Self-Directed IRA LLC. The effectiveness of this tool lies in the fact that you remain in control of your investments without being the nominal owner of the account.
Although the IRA does officially own this type of LLC, as the account holder, you will direct its use as the “Manager” of the structure. The appeal of the Self-Directed IRA LLC lies largely in the fact that it gives you greater investment freedom. You will no longer be bound by the rules and regulations of a traditional IRA custodian, nor will you have to waste time waiting for a custodian’s approval to make an investment transaction.
We specialize in ensuring that the LLC formation and management is compliant with IRS, and we also have relationships with almost every custodian (uDirect, NuView, Kingdom Trust, and more) to ensure a smooth process. We also have banking and other contacts in place for you to set up, establish, and fund your new company all without ever leaving your home. Our experts will advise you on the best banking practices for your Self-Directed IRA LLC, as well as how to avoid prohibited transactions and their costly penalties.
Royal Legal Solutions offers a comprehensive bundle of services at a reduced cost to you. The Self Directed IRA Owned LLC has upfront costs as well as yearly costs that are just like any other LLC. These fees vary from state to state but generally will include: a registered agent fee ($99/year), a Franchise Tax and Franchise Tax filing an annual fee ($300 on average), and ongoing corporate compliance fees.
We offer a full service for all of your Self Directed IRA compliance and entity compliance to ensure that you are going to be on the right side of the law with your IRA and investments. If you are ready to enjoy true investment freedom and watch your retirement dollars grow, contact Royal Legal Solutions about setting up your Self Directed IRA-owned LLC today.
Real estate investors have the experience and knowledge to enjoy great success with an IRA-owned company. This entity boasts a variety of benefits. Here are some of the most popular:
You have total authority over your account, unlike a custodian-controlled account. As a business entity, the Self-Directed IRA LLC typically has its own checking account for all related transactions.
With a Self-Directed IRA LLC, you are free to invest in both traditional and nontraditional investments. Traditional investments are things like stocks, bonds, and mutual funds, which you may already hold in a traditional IRA account.
Nontraditional investments are where investors can really get creative. For most of our clients, the Self-Directed IRA LLC’s ability to hold real estate is a major draw. There are, of course, certain types of investments that the IRS does not allow. These include things like collectibles, such as classic cars or artwork.
If you are eligible for a typical Roth IRA, you are almost certainly eligible for the Roth Self-Directed IRA LLC. Many investors, small business owners, and self-employed individuals are drawn to the Roth IRA because account holders pay taxes up front. This means that all funds inside of the account have already been taxed, and you won’t have to pay taxes “on the back end” when you take your distributions upon retirement.
With the Self-Directed version of a Roth account, you can pass these tax savings on to your investments as well.
Just like the Traditional LLC and Series LLC, the Self-Directed IRA LLC gives you asset protection. Your investments are held within the Self-Directed IRA LLC structure rather than your own name. This means if someone ever wants to sue you, you are not making it easy on them. The LLC structure isolates your assets, while you personally appear to not own anything.
Should you find yourself filing for personal bankruptcy, the value of your IRA-owned LLC’s assets will be protected up to $1 million.
Nobody knows for sure what effects inflation will have on their investments, but diversifying your dollars into real estate or other physical investments can help protect your assets from inflation. There is no guarantee that $100 today will be $100 in five, ten, or even 20 years.
Assets like real estate are less sensitive to inflation, which means the Self-Directed IRA LLC gives you a way to diversify your portfolio against this threat.
All of the investments within an IRA-owned LLC grow tax-free until the account holder takes distribution. This includes real estate investments, which are notoriously costly in terms of taxes. When an IRA-owned LLC holds a real estate investment, the property owner gets to defer these payments. The savings can be massive.
Note that you will eventually have to take distributions, but this isn’t mandatory until you reach the age of 72. The Roth version of the Self-Directed IRA LLC is funded entirely with after-tax income, meaning you don’t have to pay taxes on your distributions at all.
We have years of experience in ensuring that the LLC formation and management is compliant with IRS, and we also have relationships with almost every custodian to ensure a smooth process. We also have banking and other contacts in place to offer maximum support.
If you are ready to enjoy true investment freedom while your retirement dollars grow, contact Royal Legal Solutions about setting up your Self Directed IRA-owned LLC today. We even offer compliance services for busy, savvy investors like you.
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