A Self Directed IRA through a LLC, referred to after this as "ICO", is a special purpose limited liability company, which is either fully or partially owned by a self directed individual retirement account (IRA). Since the self directed IRA owns the ICO, IRA funds can be legally transferred to the ICO in exchange for member units (shares) of the ICO. After this funding, both traditional and non-traditional investments may be purchased by the ICO instead of directly in the IRA.
Very few IRA custodians permit direct ownership of real estate or other non-traditional investments in an IRA, so indirect investment via the ICO is usually the only choice.
When an ICO sells real estate or other investments, the capital gains are deferred through the 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 and investment decisions 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. But an IRA cannot directly participate in such a financing arrangement.
Since you control and handle all ICO transactions, the custodian for the self directed IRA can be paid an inexpensive, flat fee, typically under $200 per year
Litigation threats which accompany investments such as 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.
Continues to provide deferral of income and gains inside the IRA.
What Your Plan Comes With
Setup of LLC
Filing of state articles
Self Directed IRA compliant operating agreement
Setup and operating guide
Banking authorizations for checking account
Handling your rollover to our sister co. American Estate & Trust, the IRA custodian
