Never invest in a business you cannot understand.
—Warren Buffett
If it’s a good enough adage for Warren Buffet, it may be a good enough adage for your approach to retirement investment. That’s why we here at TurnKey IRA believe that investors shouldn’t have to invest in things they don’t like or understand. With a Checkbook IRA, you have that option. You can use an LLC’s checkbook with your IRA holding the LLC, giving you the “Checkbook IRA” that makes it easy to place simple transactions in your retirement investments. When you handle these things, it’s easier to use your Checkbook IRA LLC to focus on the investments you get. Want to know more about how it works? Here’s what you’ll need to consider.
The Mechanics of a Checkbook IRA LLC
A Checkbook IRA LLC is a structure that allows you to take direct control over your retirement investments. Instead of waiting for a custodian to approve every transaction, you set up a dedicated LLC owned by your Self-Directed IRA. This LLC has its own bank account. Now you’ll have the ability to write checks and move funds quickly. This flexibility makes it easier to invest in assets that require fast action, like real estate or private lending.
Because the IRA owns the LLC, all investment gains stay within the retirement account, growing tax-deferred or tax-free, depending on whether it’s a Traditional or Roth IRA. The key advantage here is efficiency. When you don’t have to go through a custodian for every transaction, you save time and administrative costs. That can make a big difference when you’re investing in fast-moving markets, or simply want to make easy transactions in an investment you prefer.
Investing in What You Know
One of the biggest benefits of a Checkbook IRA LLC is the ability to invest in areas where you already have expertise. If you’re well-versed in real estate, you can use your IRA funds to purchase rental properties, commercial developments, or land. If private lending makes more sense to you, your IRA can issue secured notes backed by real estate, trust deeds, or even car notes.
For investors with a background in finance or business, private loans offer another avenue. You can lend to businesses looking for capital, earning returns through interest payments. Unsecured notes carry more risk but can yield higher rewards if structured properly. If commercial real estate development interests you, your IRA can participate in projects that align with your knowledge and experience.
Staying Compliant with IRS Rules
While a Checkbook IRA LLC provides more control, it also comes with certain responsibilities. The IRS has strict rules about prohibited transactions, for example. You can’t use your IRA to lend money to yourself or buy property for personal use. Investments have to remain at arm’s length, meaning you can’t personally benefit from them until you take distributions in retirement.
Record-keeping is another crucial element. Even though you have checkbook control, your IRA still has to follow the same tax rules as any other retirement account. That means tracking income, expenses, and making sure your LLC operates strictly for investment purposes. Working with a knowledgeable custodian or financial professional can help ensure you stay on the right side of the law.
Want a Checkbook IRA LLC to work for you in a way that empowers you as an investor, rather than leaving you feeling like you have to invest in a certain style or a certain asset? Then maybe it’s time to reach out and learn more. We here at TurnKey IRA would be glad to talk to you; just call us toll-free at 844-8876-IRA (472).
Imagine a life where your retirement investments feel as easy to make as any other investment. Sure, rules are separating the two, but once you have a Checkbook IRA in place, you’d be surprised how natural it can feel to make retirement investments. Interested in learning more? Contact TurnKey IRA at 844-8876-IRA (472) for a free consultation. Download our free guide or visit us online at www.turnkeyira.com.
