The Self Directed IRA structure has been used for the past 35 years in the United States and has been used by many people seeking to use their retirement money for tax-free investments. The IRA LLC structure is for those who want total control of their investment with the benefit of it being tax-free. It derives its power from the business structure of LLC, which has a major advantage of limited liability if the account were to be sued. In each case, a special purpose limited liability company is set up for the IRA and allows investments to be made tax free. The account is also a separate entity from the person who controls it, so all other assets a person has will be protected.
Importance of the IRA LLC Structure
The most important point to remember about the IRA LLC structure is that it gives you the option to control your retirement. If you have a sound investment in mind that relates to real estate, tax liens, stocks, a mortgage, or a particular business, having control of a Self Directed IRA LLC will allow you to make these investments quickly. The only limits on these investments are IRS-defined prohibited transactions, which are outlined in the Internal Revenue Code Section 4975. For these types of investments, there is no penalty or tax on the funds to be used. It is because of the laws, as defined by the IRS, which state that the holder of such an account can make such non-prohibited transaction because of the Internal Revenue Code Section 4975.
It means that you are able to invest in just about anything you want, starting with investing in a business, real estate, gold, or any other investment which may pay off. You can use your retirement funds for making these investments and that too without incurring any additional fees or penalties.
The greatest part about this type of account, with relation to investment, is that the money can be used quickly and you can invest however you want. There is no one in control of the account other than you, so you will not require custodian consent before taking any investment decisions. You can have a diverse retirement portfolio if you use this type of account correctly. Use the money wisely, however, because investing in ventures that have a greater chance of your money being lost can seriously affect your retirement plans. The advice is always simple, research thoroughly before any other type of investment you make using money from this account.