Self Directed Ira Llc

Written by Johnny Kitchens
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Self-directed IRAs have been the subject of increasing interest in recent years because of the relative freedom such an IRA enjoys. The IRA owner has the ability to make the kinds of investments he or she wants to make whenever he or she wants to make them. In many relationships with IRA providers, the IRA owner has a relatively small say in the kinds of investments he or she can make. Choices are often limited to types of mutual funds, annuities, or other traditional investments.

A self-directed IRA allows the owner to invest in residential real estate and rental properties, timberland, franchises, and a plethora of commercial real estate opportunities. Owners of self-directed IRAs can still invest in traditional assets like stocks, bonds, mutual funds, and various commodities and their IRAs are subject to the same rules that govern all IRAs. A self-directed IRA allows the owner to take advantage of any investment allowed under the law.

Companies that offer self-directed IRAs can vary significantly in how much assistance they give to their clients. Some act as un-involved custodians who simply enact the wishes of their clients without offering advice or direction. Other companies take a more active role in helping their clients spot good investments and stay within the rules of complex investments. If you do not know the advantages of setting up an LLC with your IRA, you may want to consider the latter type.

The Limited Liability Company and the Self-Directed IRA

Forming an LLC for the benefit of a self-directed IRA gives the owner checkbook control over investments. The IRA owner can write checks directly from funds in the IRA to pay expenses on investments. When owning real estate within an IRA, this is quite desirable because every plumber, appraiser, painter, and landscaper must be paid directly from the IRA. If you pay out-of-pocket for such an expense, you can open your IRA up to penalties, fees, and taxes from the start of the year in which you made the mistake.


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