What can I invest in if I have a Self-Directed IRA LLC?
Where to begin? The sky is virtually the limit. Gone are the restrictions your traditional broker has place upon your IRA. Are you ready to invest your IRA in:
- Residential Real Estate
- Commercial Paper
- Commercial Real Estate
- Raw Land
- Mobile Homes
- Trust Deeds / Mortgages
- Real Estate in Foreign Countries
- Private Notes and Loans
- Private Stock Offerings
- Limited Liability Companies (LLC)
- Limited Partnerships (LPs)
- Tax Certificates
- Stocks, Bonds, Mutual Funds
I’ve never heard of this before. Is it new?
No. Investments in real estate, non-traditional investments and LLCs have been allowed since the creation of the LLC in the 1970. However, out of the two TRILLION dollars held in retirement accounts, only about 2% are invested outside of stocks and bonds. Why? Because people don’t know they have other options. Who would tell you? Your stock broker? Well, now you know what your options are. The secret is out of the bag.
Are there going to be taxes and penalties when I move my IRA into the Self-Directed IRA LLC?
Absolutely not! You are not taking money out of your IRA; Rather, you are investing it in another way. You are investing in the LLC and then the LLC is investing in Real Estate.
What can I move into the Self-Directed IRA LLC?
- Sep IRA
- Simple IRA
- Roth IRA
Can I buy a fixer-upper, use the IRA money to fix it up and then be the property manager?
Yes. With the Self-Directed IRA LLC you can do all of these things. If you just have a self-directed IRA with a traditional custodian, NO.
What is meant by “checkbook control”?
Checkbook control means that YOU are the signer of the checks. You have the ability to make the investment decision, sign the contract and then write the check for the investment. You are truly in control.
Can I get a loan for property owned by my Self-Directed IRA LLC?
Yes. You will need to get a non-recourse type of loan. However, when you receive a loan unrelated debt financing income tax will apply.
What are Prohibited Transactions?
An understanding of prohibited transactions is very important. The IRS defines a prohibited transaction as follows: “Generally a prohibited transaction is any improper use of your IRA account or annuity by you, your beneficiary or any disqualified person. Disqualified persons include your fiduciary and members or your family (spouse, ancestor, linear descendant, and any spouse of linear descendant).” IRS Publication 590
IRC 4975 is the section that lays out the rules on prohibited transactions. Prohibited transactions generally involve one of the following: (1) doing business with a disqualified person; (2) benefiting someone other than the IRA; (3) loaning money to a disqualified person; or (4) investing in a prohibited investment.
You need to make sure that it is your IRA that benefits from a transaction rather than you personally. Beware of any “self dealing” transactions.
Are there any Prohibited Investments?
The Internal Revenue Code outlines the following types of investments as not allowed:
- Stock in a S-Corporation
- other tangible personal property
How do I know if the Self-Directed IRA LLC is right for me?
Are you tired of having your investments restricted to stocks, bonds and mutual funds? Are you ready to invest in real estate or real estate related investments? Do you want checkbook control? Are you ready for better returns than you’ve been getting? Are you ready to see your retirement increase to the point where you can retire? Are you ready to be in control? If the answer to any of these questions is yes, you are ready for the Self-Directed IRA LLC.