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The Self-Directed Checkbook IRA:

Understanding the Process

Step 1: Establish a Self-Directed Checkbook IRA

Sense Financial will handle the complete process of setting-up your self-directed IRA LLC. The entire process may be done via email, telephone, regular mail or fax and normally can be completed in 3-4 weeks.  The setup time mainly depends on the state where the LLC is formed as well as on the speed at which your current custodian processes the transfer of funds. Our experienced team has many years of experience and will help you significantly reduce the cost and setup time.

Checkbook IRA Process

Step 2: Tax-free Transfer of Your Retirement Funds

Our experienced team will help you transfer your retirement account from your existing custodian without any tax consequences to a new IRS approved Passive Custodian.  The custodians that we work with allow for truly self-directed checkbook IRA investment opportunities such as tax deeds, real estate, hard money loans, precious metals, mortgage notes and much more.

Passive Custodian: What does it mean?
An IRS-approved custodian of a Self-Directed Checkbook IRA configuration is known as a “passive” custodian. The main reason for this is that they don’t need to review and provide approval for the IRA LLCs investments.  They simply serve the passive role to satisfy IRS rules. This form is meant solely for the creation and maintenance of IRAs, while the goal of a conventional IRA custodian is to earn profits from the advertising and sales of investments.

Key Fact:
Every custodian we partner with is insured by the FDIC and approved by the IRS. After your existing custodian has moved your money to the passive custodian, the passive custodian will, in turn, move your IRA money to the newly established IRA-owned LLC.  This allows you to obtain “checkbook control” of your retirement funds as the manager of the LLC.

With a Checkbook IRA, you no longer need to spend money on custodial fees based on the value of your account, the number of transactions you conduct, or the number of investments you hold in your account. The IRS-approved custodian of your Checkbook IRA playing a strictly “passive” role. Utilizing an IRA-owned LLC provides you “checkbook control” so that you can use all benefits and features of the self-directed IRA while avoiding high custodian fees & the delays associated with having that custodian approve all your translations.

Types of IRA Account Eligible for Rollover

  • Roth and Traditional IRAs
  • Self-Employed SEP and Simple IRAs
  • Employer Sponsored Plans: 403(b), 401(k), 457
  • Money Purchase Pension Plans
  • Keoghs, ESOPs etc.

Our experienced team will help you complete all the required paperwork in order for your accounts to be moved to the new “passive” custodian quickly while avoiding any potential tax consequences.

Step 3: Establish the Checkbook Account for Your IRA-owned LLC

Any financial institution of your choosing may be used to establish a bank account for your IRA LLC including banks, credit unions or any other financial institution.

Step 4: Transfer Funds Tax-Free to the LLC Checking Account

You will instruct your custodian to move the funds from your IRA to the newly established IRA-owned LLC checking account.  Remember that the IRA is the member of the LLC and you are the non-member manager.

Step 5: Achieve (Complete) Checkbook  Control

Assuming the managing role for your IRA-owned LLC gives you the ability to make investment choices. Simply speaking, you retain “checkbook control” of your retirement account which, in turn, makes any investment as simple as check writing from your LLC checking account or directing the bank to wire the funds.

Step 6: Make Tax-Deferred Investments

Because your self-directed Checkbook IRA is now considered the member (owner) of the IRA-owned LLC, all gains, profits or any other income produced by investments held in the LLC would typically go into your IRA free of taxes.  As far as the taxes are concerned, the LLC is considered a pass-through entity, so all gains, profits or any other income would not be taxed at the entity level but rather at the owner’s level.  

Keep in mind that, according to IRC Section 408, an IRA is considered to be tax-deferred, which means that all profits, gains, and incomes of LLC investments would go into your self-directed Checkbook IRA without taxes until years later!

What our Clients are Saying:

Ben D.

In my opinion, anyone that owns their own business should have a Solo 401K, and I would highly recommend Sense Financial – you will not be disappointed!

Ben D. – Spokane, WA

big_1448399220 avatar michaelle

Sense Financial made the entire process extremely easy and they have been very responsive. I’ve recommended them to many people already.

Michael L. – Humble, TX 

Self Directed Checkbook IRA Process

Dmitriy and his staff were consummate professionals. I rolled my Solo 401 (k) into a Self Directed Solo 401 (k). Dmitriy handled it smoothly and confidently…

Mindy Jensen – Longmont, CO
BiggerPockets Community Manager

Alternate investment options with your self-directed account:

Real Estate

Precious Metals

Private Business

Stocks & Bonds

Private Lending


Investments That Make Sense!

It’s Your Money. It’s Your Future. Invest Your Way.

Our expert team is always ready to answer you! Give us a call at (949) 228-9394. You can email us at