Paperwork. It’s your favorite part of investing, right? Okay, maybe not—but doing paperwork properly does help you achieve peace of mind, efficient organization, and a properly setup retirement account. And when you have an LLC in your Self-Directed IRA to give you checkbook control with your investments, the paperwork can be the difference between versatile investing and not being sure how to execute your next transaction. So it’s worth getting the paperwork right. Here’s what you’ll need to know as you prepare your IRA LLC documents for investment management.
Understanding the Purpose of IRA LLC Documents
Before diving into the specifics, let’s answer why IRA LLC documents are necessary in the first place. When you set up a Checkbook IRA, your Self-Directed IRA will own the LLC, which in turn owns the investment assets. This structure allows you to manage investments directly. In other words, you won’t need custodian approval for each transaction. The key documents will define the LLC’s operations, governance, and compliance with IRS rules.
- Forming your LLC. Choose a name for your LLC, ensuring it complies with your state’s LLC naming regulations and includes “LLC” in the title.
- Drafting the Articles of Organization and Operating Agreement. These documents are essential to forming a new business within your state. They’ll outline what the purpose of the business is and how it’s structured. The good news? If you’re forming a Single Member LLC, you’ll typically find that these are relatively straightforward—after all, you don’t have to figure out a complex legal or investment structure for a Single Member LLC. You just need to outline what the purpose of the LLC is, and the fact that our IRA will be its owner.
- Obtaining a bank account. The LLC holds the bank account, which is what gives you direct checkbook control. (Well—as “direct” as it can be within the context of retirement investing.) Your LLC holds the bank account, which is why you’ll need documentation like your Employer ID number (EIN) with the IRS to establish the account.
Once you have your bank account and the necessary legal documents, you’ll find that it’s much easier to track everything within your IRA LLC. For example, your bank account will document the transactions you made: the purchases, the expenses for the properties within the account, and more. Any bills that incur as expenses within your account should go to the IRA LLC as well, which helps separate you from your retirement account.
Why Handle Things This Way?
These documents aren’t just a formality. They represent fundamental steps that will impact the way you invest for years.
For starters, setting up your documents this way will keep things streamlined. You’ll have everything you need, you’ll know where the documents belong, and any associated expenses will go under your IRA.
Additionally, setting up things the right way will ensure IRS compliance. The IRS wants to make sure that your retirement investments are just that—investments within the retirement account, and not within your personal accounts. So if you have the necessary documentation with the LLC within the IRA, and all of your valid retirement transactions go through that LLC, you’ll know that you’re approaching things the right way.
Additionally? Handling things this way simply makes your life more efficient. You’ll know where the documents belong. You’ll have an LLC checkbook from which your retirement expenses should come out. You can keep these separate from your personal investments with ease.
If you want help in getting everything set up the right way, that’s what we do. Contact TurnKey IRA today toll-free at 844-8876-IRA (472) to learn more about how it’s done.
