| "So many investors are tired of watching their | | | | while it can be taxed as a partnership. Partnership |
| retirement accounts dwindle away from the | | | | taxation is great because the LLC itself will not |
| lackluster performance of the stock market, while | | | | pay taxes. Instead, the owner of the LLC pays |
| the value of their home and surrounding areas | | | | taxes as if they earned the income. Who is the |
| increase in the double digits," said Marco Caporale, | | | | owner of the LLC? Your IRA is the owner of the |
| President and CEO of Independent Executive | | | | LLC(a tax- exempt entity). Therefore, you can |
| Management, LLC. | | | | maximized your investment and pay no taxes, |
| Although using your retirement account to | | | | what a deal. |
| purchase real estate does offer the potential for | | | | What are the "alternative investments" mentioned |
| two to three times the annual appreciation of | | | | above? They are too multiple to mention here but |
| traditional stocks, it does come with a lot of | | | | I will try:real estate, other LLC's, franchises, |
| regulations and severe penalties, if not correctly | | | | unsecured loans, corporations, mortgage notes, |
| applied. That is why the right account has to be | | | | commodities and futures, joint ventures, tax liens |
| set up, the rules have to be followed and a good | | | | and tax deeds, currency exchange, times shares, |
| custodian can help. It is not difficult and it can be | | | | limited partnerships, timberland investment, real |
| done and many are doing it and making great | | | | estatle options, commercial paper, hunt lease |
| money for the future. | | | | investments, stocks, bonds, mutual funds, |
| If you read this far you are thinking, "I have | | | | annuities, ect. |
| heard of this before and all I have to do is open a | | | | Is the concept of an IRA owned LLC legal? Yes, |
| self-directed IRA." However, to truly set your IRA | | | | and the case Swanson VS. The Commissioner in |
| free, (what many call checkbook control IRA), a | | | | 1996 cleared up any doubts that anybody had |
| couple of steps have to be taken that will give | | | | about this issue. In this case the court rejected |
| you total control of your IRA funds and profound | | | | the IRS position that the business structure |
| asset protection. Yes, your IRA's, other | | | | constituted a prohibited transaction. The IRS was |
| retirement accounts, and other investments are | | | | so wrong that the judge had the IRS refund legal |
| not protected from law suits and you can loose | | | | fees to MR. Swanson. |
| your nest egg. | | | | How can you create this magnificent business |
| Let me start by giving you some background | | | | structure to increase money for your retirement |
| information. First of all, most custodians, even true | | | | years? Here are the simple steps: |
| self directed custodians, require massive amounts | | | | 1. Open a self-directed IRA account. 2. Transfer |
| of paperwork and numerous hoops to jump | | | | your IRA assets to the new, self-directed IRA |
| through in order for you to invest your IRA | | | | account. 3. Establish a LLC in the state of your |
| money in an "alternative" investment. This costs | | | | desire. 4. Apply for your LLC's employer's |
| you time and money (custodian fees). To more | | | | identification number (EIN). 5. Set up a brokerage |
| effectively use your IRA, your IRA will instead | | | | account or bank account for your LLC. 6. When |
| place all of its assets into a limited liability company | | | | you are ready to invest instruct the custodian to |
| (LLC). Therefore, there is only one asset to be | | | | place the IRA assets into the bank account or |
| declared by the custodian to the IRS and this | | | | brokerage account of the LLC. 6. Start |
| translates to fewer fees to you. Notice I did not | | | | checkbook investing. |
| say that your custodian manages your IRA. Then | | | | Finally, you can move into the sef-directed IRA |
| who manages the IRA? well, you of course. | | | | owned LLC other retirement plans, 401ks, 403B |
| Why an LLC? The LLC gives great asset | | | | and have other investors joint in with you. Good |
| protection and tremendous tax advantages. The | | | | luck and happy investing. |
| LLC enjoys the asset protection of a corporation | | | | |