IRA LLCs have become an increasingly popular investment for self-directed IRA Investors. An IRA LLC is a name for a process where a Self-Directed IRA invests in a newly formed LLC. In most cases, the LLC is owned 100% by the Self-Directed IRA and where the IRA owner serves as manger. There are many benefits to using this vehicle for your self-directed investments. These benefits can include:

• Checkbook control: The IRA LLC allows you to make timely investments into assets like real estate, tax liens, and foreclosures that otherwise would be very time consuming through a custodian.
• Limited Custodial Fees: Regardless of how much money you have, or the amount of investments you make, an IRA LLC should not have to pay any transactional, asset or holding fees.
• True Diversification: Purchase traditional investments like stocks, bonds and mutual funds in addition to real estate, tax liens, franchise or small businesses through the IRA LLC.
• Multiple Investors: When structured appropriately, an IRA LLC can allow you additional buying power and investment opportunities by combining investment capital from many sources.

Like all things, there are certain rules and regulations regarding IRA transactions that, if violated, can result in taxes and penalties. Regardless of whether you use a Self-Directed IRA or IRA LLC, the penalties are steep when it comes to prohibited transactions. It is extremely important to use a very experienced firm or qualified tax attorney in handling these sorts of transactions.
There are two primary reasons:

• Formation process: The formation of the LLC, and the investment by the IRA, needs to be completed n a particular process. If the IRA LLC is created in the wrong order, or if the LLC documents are not executed correctly, you can create a prohibited transaction. This could open you up to a potential IRS audit.
• Prohibited Transaction Analysis: LLC IRA facilitators should be familiar with prohibited transactions and have a duty to inform their clients when they see a potential violation. Although a Self-Directed IRA owner is ultimately responsible for avoiding a prohibited transaction, facilitators will try to offer input if they see a potential prohibited transaction.

To forward with the LLC IRA process, please complete the LLC questionnaire and engagement letter.  These documents should be faxed to us at (888) 933-2950 or emailed to info@myselfdirect.com.