What are the benefits of having an IRA LLC over just a standard IRA?
Self directed IRA LLC is a type of IRA where the retirement plan holders or investors choose to invest their IRA funds in a LLC (Limited Liability Company). This LLC is not your standard run-of-the-mill LLC. If you try to go that route, then you won’t get anywhere with an IRA custodian. This is due to the rules related to IRAs.
Properly setting up a self directed IRA as a LLC, where the IRA owns the LLC, can offer the following benefits.
1. This can trim down custodial processing delays, transactional fees and other paperwork related to the investment. The procedure is not different from other self directed IRA investment options where an investor assigns a custodian to maintain his IRA assets and file important records relating to the assets. In any case, the custodian may not, in any way, be allowed to give financial advice regarding the investment decisions of its investor.
2. What sets the self directed IRA LLC apart from other business ventures is that the investor or account holder may carry out business transactions without the direct participation of his custodian. This cuts down custodial fees and delays which typically occur with other IRA accounts.
3. The IRA account holder has more direct control over the investments in LLC just as they might with a standard self directed IRA. This includes his investment decisions. However, this does not mean that you can just use the money for personal interests or for investments that violate the IRS prohibitive transactions. Again, you need to be vigilant and seek the advice of good counsel, namely a specialist that understands IRA thoroughly.
What Is the Difference Between a Self Directed IRA or Self Directed Real Estate IRA?
A self directed IRA is commonly termed as self directed real estate IRA. Why? It is because of the very fact that this type of IRA permits the account owner to make investments in real estate properties aside from bonds, stocks, and other types of assets. Click here to see the real estate IRA process. Other kinds of IRA, such as the traditional IRA and the Roth IRA, differ from a self directed IRA because they only allow the account holder to invest in a small number of investment options. However, that doesn’t mean that the self directed IRA should be everybody’s choice. Making investments is only one aspect of a retirement plan and there are still other factors that should be considered. Due to that, one who is desiring to open an IRA account should consult a financial adviser who is expert in individual retirement arrangements first. This ensures that the best type of individual retirement account is taken.
For more answers to self directed IRA frequently asked questions, visit our common questions page of our website. There you will find more information. Happy investing.