The Self-Directed Checkbook IRA LLC
Deemed single member for tax filing purposes – An LLC (Limited Liability Company) that is solely owned by IRAs is considered a single member LLC for tax filing purposes; therefore, the IRA LLC does not file a tax return. However, the IRA LLC is subject to filing a tax return (Form 990T) in two circumstances. First, that your IRA LLC earns Unrelated Business Taxable Income https://www.investopedia.com/terms/u/ubti.asp and secondly, your IRA LLC earns Unrelated Debt-Financed Income https://www.irs.gov/pub/irs-tege/eotopicn86.pdf.
Why choose a Self-Directed Checkbook IRA LLC?
There are many reasons why the Self-Directed Checkbook IRA LLC is the investment vehicle of choice for investing retirement funds, including the following:
- Alternative Investments Besides still retaining option to invest in equities (stocks and mutual funds), since 2002 the Self-Directed Checkbook IRA owned LLC has steadily grown in popularity as the common form of business for placing real estate purchases in addition to tax liens, precious metals, mortgages and private company shares, to name a few.
- Checkbook Control over Retirement Funds A Self-Directed Checkbook IRA LLC is manager managed as opposed to member managed. As such, as the named LLC manager, you are in full control over placing the LLC IRA investments in any investment not prohibited under the IRS regulations. IRA LLC investment purchases are generally made by writing a check from the LLC checking account and processed in the name of your IRA LLC.
- Reduced Fees and Timely Place Investments Many IRA investors are opting for the Self-Directed Checkbook IRA owned LLC to greatly reduce processing fees, holding fees and to process time-sensitive investment purchases such as real estate and tax liens. Advice and creation of the necessary paperwork to create a Self-Directed Checkbook IRA owned LLC is the only service provided by IRA LLC LAW.
How does it Work?
After transferring retirement funds such as 401(k), 403(b) and IRAs to the new Self-Directed Checkbook IRA and then capitalizing the Self-Directed Checkbook IRA owned LLC, start placing alternative investment purchases by writing checks directly from the LLC checking account. A Self-Directed Checkbook IRA LLC results in flexibility to invest retirement funds while still taking advantage of the tax benefits offered under the traditional IRA and Roth IRA.