What is a Checkbook IRA?

Many are unaware that checkbook control over retirement accounts is possible. And some may be confused about what is a Checkbook IRA.

So what is a Checkbook IRA?

A Checkbook IRA is a type of self-directed IRA (Individual Retirement Arrangement) that allows the account holder to bypass the custodian and make investments from the IRA with checkbook control. Industry experts also refer to this vehicle as a self directed IRA LLC or an IRA LLC.

Advantages and features

The Checkbook IRA is growing in popularity as people discover its advantages and features. It expands the range of investments, enabling you to invest your retirement account beyond Wall Street. Real estate, precious metals, bonds, tax liens & tax deeds, hard money loans, mortgage notes and much more are all possible investments from this vehicle.

It is also time and cost-effective. There are no transaction fees or asset fees for the investments that occur within the IRA LLC. And investment gains held in the IRA LLC are tax deferred and can be even tax free.

Understanding the process

The first step in creating this vehicle is to open your account with an IRS-approved passive custodian. A special-purpose Limited Liability Company (LLC) is established, and the passive custodian then funds the LLC with the IRA.

The process requires the knowledge and expertise of a skilled facilitator or service provider. An incorrect step can cause your IRA to be disqualified and result and taxes and penalties from the IRS. 

Sense Financial has helped many establish an IRA LLC. With its many years of experience, the team can ensure a process that is smooth and efficient.