How to Invest Self Directed IRA Funds in a Limited Liability Company & Make Nontraditional Investments

Question 1:  Can I form a limited liability company in which my IRA is a member and use all or a portion of my IRA funds to make self directed investments through the LLC in various assets, including, but not limited to, real estate?

Answer:  Yes, but there are some types of assets that cannot be acquired.

Question 2:  Does it take a ton of money and a rocket scientist to form an LLC owned by an IRA (“IRA LLC”)?

Answer:  No:  I form Arizona IRA LLCs for .  I’m not a rocket scientist, but I am an Arizona LLC and business attorney who has a masters degree in income tax law from New York University School of Law.  I understand how to form IRA LLCs and have formed LLCs, including many IRA LLCs.  See our five star Google & Birdeye reviews.

Why I Form IRA LLCs

Because I have formed limited liability companies, people frequently contact me and ask if I can create an Arizona LLC owned by one or more IRAs.  The answer is yes.  For the purpose of this article, […]

How to Invest Self Directed IRA Funds in a Limited Liability Company & Make Nontraditional Investments2024-03-08T07:29:10-07:00

The Self Directed IRA – The Basics all Estate Planners Should Know

Warren Baker’s post on the WealthCounsel blog states: “Let’s assume for a moment that your client’s goal is to invest into a piece of residential rental real estate. Your client can either:  (1) request that the new custodian purchase the property directly on behalf of the IRA; or (2) direct the custodian to first invest the IRA into a Limited Liability Company (“LLC”) that is thereafter 100% owned by the IRA and purchase the property using the LL (note: your client will act as the Manager of this LLC).  The latter option gives your client the flexibility to purchase the property using a check from the LLC’s checking account, which depending on the custodian’s ability to move quickly, will be quicker than option number one.”

The Self Directed IRA – The Basics all Estate Planners Should Know2018-05-13T13:58:52-07:00

Why Do Some Document Preparers & Attorneys Charge a Lot More to Form an IRA LLC than You Charge?

Question:  Why do some document preparers and attorneys charge substantially more than the you charge to form an IRA LLC?

Answer:  Because they can get away with it.  Most attorneys who may routinely form limited liability companies never form an LLC that has an IRA or a retirement plan as a member so they are unlikely to form this type of LLC when asked.  Most of the small number of attorneys and document preparers who actually form IRA LLCs charge far too much because they have little, if any competition, and they know that is it very unlikely a prospective client/customer will be able to find somebody else with the knowledge and experience to form an IRA LLC.  These types charge far too much because they believe they have a monopoly and can set a high price because clients/customers have no other place to go to form an IRA LLC.

Years ago I went to a seminar in Phoenix, Arizona, about how to use self-directed IRA funds to invest in real estate through an IRA LLC.  The person who gave the presentation was an attorney not licensed to practice law in Arizona.  He told […]

Why Do Some Document Preparers & Attorneys Charge a Lot More to Form an IRA LLC than You Charge?2024-03-08T07:35:28-07:00

Savvy Buyers Use Self-directed IRA to Buy Homes

San Francisco Chronicle:  “With many properties at bargain-basement prices, more people have been turning to their self-directed IRAs as a ready source of capital to make real estate investments. Companies that manage self-directed IRAs say real estate investments by their clients are up as much as 30 percent over the past year. . . . Self-directed IRAs account for just 2 percent of the $4.2 trillion IRA market, but are among its fastest- growing segments. They allow access to a variety of investment vehicles beyond just stocks and bonds. The IRS closely regulates them, and any real estate investments must be handled by IRA custodian firms that hold the property inside the IRA.”

Savvy Buyers Use Self-directed IRA to Buy Homes2018-05-13T13:58:56-07:00

Kinky IRAs

Forbes:  “Church bonds. Mexican land. Pay telephones. Swiss annuities. Bus shelters. Gold coins. Paintings. Mortgages. Untraded stock. Bull sperm.  Bet you don’t know which five of these ten assets are permissible investments in Individual Retirement Accounts. . . . If you’re interested in unconventional assets, it’s worth boning up on the rules, because most lawyers and IRA custodians have only partial knowledge.”

See the table of custodians that allows self directed IRA investments.

Kinky IRAs2018-05-13T13:58:56-07:00

Self-Directed IRA a Good Bet?

CNBC:  “If you recently watched your individual retirement account or 401(k) drop by double digits, you may wonder if there is a better way to sock away money in an uncertain economy.  What if you could replace some of your investments with tax-deferred holdings not tied to the troubles on Wall Street? Maybe you’d prefer to invest in cattle in Wyoming, a gas station in Philadelphia or an underwater cemetery in Miami.”

Self-Directed IRA a Good Bet?2017-09-10T16:28:06-07:00
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