The Checkbook IRA - The IRA-Owned LLC

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Education & Training with uDirect IRA Services, LLC

Join us live Tuesday February 9 or Tuesday February 16th from 6-8pm and bring your questions! To attend register via the uDirect CALENDAR The IRS rules allowing Self-Directed IRA’s to own LLC membership interest is the key that makes the IRA-LLC so powerful. First you move your existing IRA to a Self-Directed Custodian (one with no investments to sell you). Next we help the IRA Custodian organize a specially customized LLC.

 

A LLC is a legal entity that has powers and protections that are not possessed by any individual or by any regular IRA. It is the combination of the self-directed IRA and a specially designed LLC that yields such beneficial results. This is an entirely new type of LLC. It is started, created, and owned entirely by your IRA. It’s an LLC that is designed specifically for an IRA that respects IRS and Department of Labor codes governing IRAs. The legality of an IRA owning an LLC was affirmed in the case Swanson vs. The Commissioner in 1996. The lesson learned from Swanson was that the LLC must contain very specific language that meets all IRA and Department of Labor codes and requirements. WHY AN LLC A Limited Liability Company is a business entity that is a cross between a Corporation and a Partnership. Thus, an LLC provides the limited liability protection of a corporation, but with pass-though taxation. ASSET PROTECTION OF AN LLC In addition to offering control over a wide choice of investments, the IRA-LLC offers unparalleled asset protection from judgments and creditors. In addition to the tax benefits afforded by tax deferral IRA laws, the IRA assets are also protected by the strong LLC laws and statutes. For example, if someone were to win a lawsuit against you, they could not take away the assets inside the LLC (i.e., your retirement assets). What they would receive is a “charging order” against the LLC. A charging order doesn’t give the individual rights over the LLC. At most they would be entitled to any distributions made out of the LLC, if any! It is strictly up to the LLC whether or not to make distributions.

Let’s say the LLC made $50,000 in profits and you decided to keep it all in the LLC and reinvest it. In other words, no distributions were made. The individual holding the charging order (the judgment creditor) would owe the IRS tax on that profit! This is because an IRA-LLC is a “flow through” entity. The fact that no funds were distributed or reinvested within the LLC retirement plan makes no difference to the IRS. The person holding the charging order is now liable for the taxes each year. Who would want to pay taxes on profits that may not be distributed for years? Ask any attorney and they will tell you it is almost never worth suing an LLC. With an IRA-LLC you can have great protection against sue happy lawyers and their predatory clients. PROTECT WHAT YOU’VE EARNED Many investors have been told by their exiting IRA custodian/broker that they are limited to stocks, bonds, mutual funds and CD’s as IRA investments. The fact that you have a retirement account proves that you have worked hard and taken charge of your life. But 97% of all IRAs are in the control of custodians/brokers that decide for you what your IRA should invest in. Wow, you work your whole life to build up a nest egg and a stranger makes all your investment decisions.

Perhaps it’s time to establish an IRA-LLC, protect your investment, and put your money in projects which you have knowledge and control.

To attend, register via the uDirect CALENDAR www.uDirectIRA.com

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Rainer
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Kaaren Hall

You can invest in real estate using your IRA!
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