A checkbook IRA is also referred to as an IRA LLC, or checkbook control. To put it simply, it’s a self-directed retirement savings account that is invested in an LLC, that you, the account owner, has complete control over. When you open an IRA LLC you receive a physical checkbook tied to the LLC, and therefore, your IRA funds act as a checking account for the LLC.
What are the IRA LLC Benefits?
An ICO, also referred to as a Checkbook IRA LLC, allows you to hold real estate or other non-traditional investments within checkbook IRAs. Few IRA custodians permit direct ownership of real estate or other non-traditional investments in an IRA, so investing in a self-directed IRA LLC is usually the only choice.
When the ICO sells real estate or other investments, the capital gains are deferred through your IRA, like any other IRA investment. The headaches of 1031 exchanges are never necessary. Ownership of the property in an ICO allows you, as manager, to have direct, hands-on control of an investment decision over ICO assets, including control of the checkbook. Custodian involvement and hassles are eliminated, regardless of whether the investments are in securities, real estate or other assets.
An ICO can use its IRA funding as a down payment for a real estate purchase, with the ICO financing or borrowing the balance. An IRA cannot directly participate in such a financing arrangement. Since you control and handle all ICO transactions, the custodian for the IRA can be paid an inexpensive, flat fee.
Litigation threats which accompany investments like real estate are substantially reduced. This is done by isolating the investment inside the ICO, and away from the rest of your IRA funds and estate. An ICO continues to provide a deferral of income and gains inside the checkbook IRA.
With checkbook control, your IRA is truly in your hands. You’re now not only in total control of how your IRA functions, but how and when you choose to invest. Cut out the middleman, gain the freedom of choosing how you invest, and ask us how you can open your own IRA LLC today.