Reasons Investing is Smarter With a Checkbook IRA

checkbook ira - square

When a self-directed IRA owner has complete control and signing authority over their retirement funds, the term Checkbook IRA or Checkbook Control is used. With checkbook control, you never have to depend on custodian’s approval or consent to proceed with any investment decision (so long as rules are abided). Checkbook control isn’t a mandatory requirement to invest with your self-directed IRA, but it’s one of the many benefits that some IRA holders are missing out on.

Simple Rules

One big reasons that checkbook control is such an attractive option is the freedom it allows. The list of what are called “prohibited transactions” is short and sweet. Prohibited transactions are transactions between the IRA and disqualified persons. Prohibited transactions and disqualified persons are defined as follows:
The term “prohibited transaction” means any direct or indirect:

  • Sale or exchange, or leasing of any property between a plan and a disqualified person
  • Lending of money or other extension of credit between a plan and a disqualified person
  • Furnishing of goods, services, or facilities between a plan and a disqualified person
  • Transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a plan
  • Act by a disqualified person who is a fiduciary whereby the deals with the income or assets of a plan in his or her own interests or for his or her own account
  • Receipt of any consideration for his or her own personal account by any disqualified person who is a fiduciary from any party dealing with the plan in connection with a transaction involving the income or assets of the plan.

Control on the Go

Through a checkbook IRA, your investments can be controlled easily. If you have found an investment opportunity, all you need to do is write a check to buy it. You can even wire the funds; filling out tedious paperwork, waiting for other’s approval/funds or them writing a check for you is a thing of the past. This helps save you crucial time.
Accuplan Benefits Services has gone a step further in making investing easy for our customers by introducing AccuPayz last year. Instead of writing a check to invest, our customers can swipe their AccuPayz card right then and there. AccuPayz is a debit card that’s directly linked to your IRA, and debits the account just like a bank card. Plain and simple.

A Variety of Options

With a self-directed IRA, you can invest in an array of allowable asset classes outside of the normal traditional investments.

Some alternative investments include:

  • Real Estate – residential and commercial – condos, mobile homes, foreign
  • Raw Land
  • Trust Deeds/Mortgage and Mortgage Pools
  • Private Notes and Loans – e.g. Loans to a non-disqualified person for a car etc.
  • Private Stock Offerings – also referred to as PPM’s
  • Limited Liability Companies – LLC’s
  • Limited Partnerships – LP’s
  • Tax Certificates – Tax Liens
  • Annuities
  • Options
  • Currency
  • Futures
  • Commercial Paper
  • And MANY other investments

Prohibited Investments:

  • Collectibles – Artwork, Rugs, Antiques, Metals, Gems, Stamps, Collectible Coins
  • Beverages
  • Stock in a S-Corporation