A Self-Directed IRA
Company That Earns
Your Trust

Invest in what
you know
and trust

Take control
of your
retirement funds

One low fee
starting at
$180 per year

Call us today!

1-800-472-1043

Call us today!
1-800-472-1043

A Self-Directed IRA
Company That Earns
Your Trust

A Self-Directed IRA
Company That Earns
Your Trust

Call us today!

1-800-472-1043

One low fee
starting at
$180 per year

Take control
of your
retirement funds

Invest in what
you know
and trust

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A Self-Directed IRA offers one the ability to use his or her retirement funds to make almost any type of investment on their own without requiring the consent of any custodian or person. The IRS only describes the type of investments that are prohibited, which are very few.

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.

With a Self-Directed IRA with checkbook control, flipping homes or engaging in a real estate transaction is as simple as writing a check. As manager of your Self-Directed IRA LLC, you will have the authority to make real estate investment decisions on behalf of your IRA on your own without needing the consent of an IRA custodian. One of the true advantages of a checkbook control IRA is that when you want to purchase a home with your self-directed IRA, you can make the purchase, pay for the improvements, and even sell or flip the property on your own without involving the IRA custodian.  And the best part is that all gains generated from the house flipping transaction will flow back to the IRA LLC tax-free!

When it comes to using retirement funds to invest in a hedge fund, it is important to be mindful of the IRS prohibited transaction rules under Internal Revenue Code Section 4975. In general, the IRS has restricted certain transactions between the IRA and a “disqualified person”. The definition of a “disqualified person” (Internal Revenue Code Section 4975(e)(2)) extends into a variety of related party scenarios, but generally includes the IRA holder, any ancestors or lineal descendants of the IRA holder (i.e. parents, children, spouse, daughter-in-law, or son-in-law), and entities in which the IRA holder or a disqualified person holds a controlling or management interest. Furthermore, Internal Revenue Code Section 4975(c)(1)(D) and (E) outlines rules that relate to self-dealing or conflict of interest transactions that involves an investment that could directly or indirectly personally benefit a disqualified person. The self-dealing or conflict of interest prohibited transaction rules have the broadest application especially when it comes to hedge fund type investments.

With IRA Financial Trust’s Self-Directed IRA, you are permitted to purchase an interest in a privately held business that is engaged in any type of business activity. The business can be established as any entity other than an S corporation (i.e., LLC, C corporation, or partnership) When investing in a private business using Self-Directed IRA funds, it is important to keep in mind the “Disqualified Person” and “Prohibited Transaction” rules under IRC 4975 and the Unrelated Business Taxable Income rules under IRC 512. It is a good idea to consult a retirement tax professional to develop the most tax-efficient structure for using your Self-Directed IRA.

The main advantage of a Roth IRA over a Traditional IRA is that if you qualify to make contributions, all distributions from the IRA are tax-free. Furthermore, unlike traditional IRAs, you may contribute to a Roth IRA for as long as you continue to have earned income (for a traditional IRA - you can't make any contributions after you reach age 70 1/2).

In general, a Self-directed IRA LLC may be funded by a transfer from another IRA account or through a rollover from an eligible defined contribution plans, defined benefit plans eligible defined contribution plans include qualified 401(k) retirement plans under Internal Revenue Code Section 401(a), 403(a), 403(b), and governmental 457(b) plans.

In general, most Americans have an enormous amount of financial exposure to the financial markets. Whether it is through retirement investments such as IRAs or 401(k) plans, or personal savings, many of us have most of our savings connected in some way to the stock market. In fact, over 90 percent of retirement assets are invested in the financial markets. With what is believed to be approximately $25 trillion in retirement assets as of 2014, you can see the scope of that exposure. Investing in nontraditional assets such as real estate offers a form of investment diversification from the equity markets.

Many traditional IRA custodians advertise themselves as offering a Self-Directed IRA, but what that really means is that you will need approval from your custodian before making an investment. Whereas, in the case of a truly Self-Directed IRA, a limited liability company (“LLC”) is established that is owned by the IRA account and managed by the IRA account holder providing the IRA holder with “checkbook control” over his or her funds.

It’s a little-known fact that tax liens can be purchased with retirement account funds. By using a Self-Directing IRA to purchase tax liens, your profits are tax-deferred back into your retirement account.

Tax lien and tax deed investments have become popular investment choices for many Self-Directed IRA plan participants. Beginning in 2009, as foreclosures continued to pile up, many properties were saddled with unpaid property taxes. For some investors, this created a great investment opportunity.

IRA Financial Trust Company, founded by Adam Bergman, to begin offering self-directed IRA and checkbook IRA accounts in 2016

IRA Financial Trust Company will begin allowing its clients to establish self-directed IRA or checkbook control IRA accounts beginning in February 2016.

IRA Financial Trust clients will have the opportunity to hold their retirement funds held at Northern Trust, one of the most respected banks in the world, offering our self-directed IRA clients with a safe and secure way to make alternative asset investments, such as real estate, precious metals, tax liens, and much more.

A Self-Directed IRA LLC offers one the ability to use his or her retirement funds to make almost any type of investment on their own without requiring the consent of any custodian or person. The IRS and Department of Labor only describe the types of investments that are prohibited, which are very few.

The ability to invest retirement funds in a newly established special purpose entity owned 100% by an IRA and managed by the IRA holder has been deemed legal by the Tax Court and IRS for over 18 years. However, only until recently, did the Tax Court confirm that the use of a newly established Limited Liability Company (“LLC”) wholly owned by an IRA and managed by the IRA holder would not trigger a prohibited transaction. On October 2013, the Tax Court in T.L. Ellis, TC Memo. 2013-245, Dec. 59,674(M) (“TC Memo 2013-245”) held that establishing a special purpose Limited Liability Company (“LLC”) to make an investment did not trigger a prohibited transaction, as a newly established LLC cannot be deemed a disqualified person pursuant to Internal Revenue Code Section 4975.

The IRS permits using retirement funds to make loans or purchase notes from third parties. By using a Self-Directed IRA to make loans or purchase notes from third parties, all interest payments received are tax deferred until a distribution is taken. In the case of a Self-Directed Roth IRA, all gains are tax-free. When engaging in private lending transaction or purchasing notes, it is important to make note of the IRS prohibited transaction and disqualified person rules, which are found in IRC 4975.

There’s no right or wrong answer. The decision usually depends on a variety of factors and circumstances.

If you are not eligible to take advantage of tax-deductible contributions to a traditional IRA but qualify for after-tax contributions to a Roth IRA, then the Roth IRA is the better choice. Roth IRA contributions are made in after-tax dollars, while earnings are usually not taxable.

RETIREMENT accounts have become many Americans' most valuable assets. That means it is vital that you have the ability to protect them from creditors, such as people who have won lawsuits against you.

In general, the asset/creditor protection strategies available to you depend on the type of retirement account you have (i.e. Traditional, IRA, Roth IRA, or 401(k) qualified plan, etc), your state residency, and whether the assets are yours or have been inherited.

Since the creation of IRAs back in the early 1970s, the IRS has always permitted an IRA to purchase, hold, or flip real estate.   In fact, it states it right on the IRS website. By using a Self-Directed IRA to buy real estate, you will be able to purchase raw land, domestic or foreign real estate, residential or commercial property, flip homes, and much more tax-free and without requiring custodian consent!

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.”