Self Directed IRA LLC – A Smart Choice?
For the maximum control of their IRA, many individuals select a self directed IRA LLC. With this type of account , the investor himself is the only one with the authority to access bank accounts for the IRA and for the LLC. A self directed IRA LLC is designed to give a reduced amount of control to the custodian and more to the owner of the account . It is a self directed IRA with a Limited Liability Company structure built in . The investor has the custodian invest the IRA directly in to the LLC that he or she owns. Because of this structure, the owner can initiate transactions without needing to get approval from the custodian. This arrangement should also reduce fees and paperwork, and avoids many delays on transactions. As an additional benefit, it can deduct the profits on the taxes. A Limited Liability Company has combined elements of a partnership agreement combined with a corporate structure, and the LLC has been an allowed form of IRA since 1996. The landmark case that was heard and passed gave investors the right to legally pass profits through their LLC directly into their IRA. In itself, the self directed IRA has given investors the ability to manage their retirement accounts more closely, and an opportunity to choose from a broader variety of investment options . They can choose the traditional investments including stocks, bonds and municipal funds, as well as less traditional choices including real estate and tax liens. The challenge was to match their investment philosophy with a custodial company, since not all custodians allowed that broader scope of investment vehicles or had expertise working with all of the options. In the self directed IRA LLC that issue is resolved with the account owner having the ultimate control over the LLC and the ability to pass investments through it into the IRA.
