Checkbook Control of Self-Directed IRA

8 Replies

@Gary Burnett

A LLC owned by an IRA is not a DIY project.

Firstly, you can create issues surrounding self-dealing violations through the provision of services if you do the work yourself and pay for state fees personally.

The LLC itself needs to be specially formed with respect to tax ID and operating agreement to be suitable for use by the IRA and acceptable to the IRA custodian as an investment.

Most importantly, firms that specialize in these structures provide guidance with respect to your usage of the IRA owned LLC and proper operation within the IRS guidelines. That guidance is the real value.

@Gary Burnett

The LLC needs to designed utilizing the tenets of the Swanson vs IRS case that established the foundation of the checkbook Ira. I agree with @Brian Eastman that you must be careful and I would recommend using a professional for many reasons. PM me if you need help for local Nj professionals/attorney. 

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@Carl Fisher, @Brian Eastman

Thanks for the reply, this is very helpful. I had a discussion with the Asset Exchange Strategies who was also able to offer some guidance. 

This will NOT be a DIY exercise.

Thanks again!

@Gary Burnett

You don't have to use an attorney, in fact, most attorneys have no experience with IRA LLC and won't touch it as you must follow the rules to ensure IRS compliance. But you do want to use a professional or a company specializing in these.

@Dmitriy Fomichenko , @Carl Fischer , @Brian Eastman

The guidance was well received and some of the steps are complete. The LLC was formed in NJ with the custodian as owner -- Operating Agreement is in progress. What I found to be interesting is that the custodian was listed as the owner of the LLC on the formation document and not my IRA FBO Gary Burnett #12121212. The understanding/guidance is that the ownership by IRA FBO Gary Burnett #12121212 will be outlined in the Operating Agreement.

@Gary Burnett

It is interesting that the custodian (with no IRA information) was listed as the owner on the LLC formation document. Not all states will collect member information on their filing document for an LLC, but I have not seen a custodian listed as a member without any mention of the actual IRA. Perhaps that was an attempt at greater privacy?