Tax Advantages: With the Self-Directed IRA LLC, you have all the tax advantages of traditional IRAs, as well as tax deferral and tax-free gains. All income and gains generated by your IRA investment will flow back to your IRA tax-free. By using a Self-Directed IRA to make investments, the IRA owner is able to defer taxes on any investment returns, thus, allowing the IRA owner to benefit from tax-free growth. Instead of paying tax on the Self-Directed IRA returns of an investment, tax is paid only at a later date when a distribution is taken, leaving the investment to grow tax-free without interruption.

In addition to the significant tax benefits in using a Self-Directed Roth IRA LLC to make investments, the Roth IRA also offers a number of very exciting estate planning opportunities.

Internal Revenue Code Section 514 requires debt-financed income to be included in unrelated business taxable income.

In 1997, Congress, under the Taxpayer Relief Act, introduced the Roth IRA. This is like a traditional IRA but with a few attractive modifications. The big advantage of a Roth IRA is that if you qualify to make contributions, all distributions from the Roth IRA are tax free—even the investment returns and appreciation—as long as the distributions meet certain requirements.

A SIMPLE (Savings Incentive Match Plan for Employees) IRA plan allows employees and employers to contribute to traditional IRAs set up for employees. Employees may choose to make salary-reduction contributions, and the employer is required to make either matching or nonelective contributions. Contributions are made to a retirement account or annuity set up for each employee.

A Simplified Employee Pension (SEP) plan provides business owners with a simplified method to contribute toward their employees’ retirement, as well as their own retirement savings. A SEP is essentially an employer-sponsored profit-sharing plan. Contributions are made to a retirement account or annuity set up for each plan participant.

A Self-Directed IRA LLC with “Checkbook Control” plan is an IRS and tax court approved structure that will allow you to use your IRA funds to make almost any type of investment, including real estate, tax liens, precious metals, foreign currency and much more tax free!

IRA Financial Trust Company will assist you with making a Roth IRA conversion in connection with your Self-Directed Roth IRA. A conversion to a Roth IRA results in taxation of any untaxed amounts in the traditional IRA. However, the 10% early distribution penalty will not apply.

A Real Estate IRA LLC is generally also referred to as a Self Directed IRA LLC with “Checkbook Control”. A Real Estate IRA LLC or Self-Directed IRA LLC with “Checkbook Control” plan is an IRS and tax court approved structure that will allow you to use your IRA funds to purchase real estate or make almost any other type of investment tax- free!

The Internal Revenue Code does not describe what a Self-Directed IRA can invest in, only what it cannot invest in. Internal Revenue Code Sections 408 & 4975 prohibits Disqualified Persons from engaging in certain type of transactions. The purpose of these rules is to encourage the use of IRAs for accumulation of retirement savings and to prohibit those in control of IRAs from taking advantage of the tax benefits for their personal account.

The maximum contribution limit for a self-directed IRA for 2016 is $5,500 or $6,500 if you’re age 50 or older, or your taxable compensation for the year, if less. Contributions to a self-directed Roth IRA may be limited based on your filing status and income.

Contributions made to a self-directed IRA LLC must be made to the IRA administrator/custodian and may not be contributed directly to the LLC. Once the IRA contribution is made to the IRA administrator/custodian, the funds can then be transferred to the IRA LLC.

Tax Advantages: With the Self-Directed IRA LLC, you have all the tax advantages of traditional IRAs, as well as tax deferral and tax-free gains. All income and gains generated by your IRA investment will flow back to your IRA tax-free. By using a Self-Directed IRA to make investments, the IRA owner is able to defer taxes on any investment returns, thus, allowing the IRA owner to benefit from tax-free growth. Instead of paying tax on the Self-Directed IRA returns of an investment, tax is paid only at a later date when a distribution is taken, leaving the investment to grow tax-free without interruption.

In general, under Internal Revenue Code Section 4975, any corporation, partnership, trust, or estate in which the IRA holder holds less than 50% interest in would not be treated a s a disqualified person. In other words, the IRA and the IRA owner cannot invest 50% equally in a joint venture without triggering a prohibited transaction. In addition, the IRA’s investment cannot be made to facilitate or protect the IRA owner’s investment in the enterprise. However, the IRA and the IRA owner may form a partnership in which the IRA owner and his or her family own less than 50% of the partnership, provided the IRA owner derives no benefits (other than incidental benefits) from the IRA investment. Many IRA advisors stop here, wrongly concluding that the IRA can freely do business with any person or entity who is not a disqualified person. Internal Revenue Code Section 4975(c)(1)(E) prohibits any “act by a disqualified person who is a fiduciary whereby he deals with the income or assets of a plan in his own interests or for his own account.” There is no requirement in Internal Revenue Code Section 4975(c)(1)(E) that the person or entity on the other side of the transaction be a disqualified person. All that is required is for the fiduciary to deal with income or assets of the plan “in his own interests.”