John Worley Blog

Checkbook Control IRA LLC

John Worley - Friday, December 15, 2017

A checkbook control IRA LLC is a self-directed IRA owning a limited liability company (LLC) where you are the manager, with checkbook control. Checkbook control means you need not wait for a custodians approval. The structure also provides a variety of options for investing the funds from your IRA. Examples of approved investments include tax liens, real estate, precious metals, franchises, foreign currency and others. A checkbook control IRA LLC provides complete control of your retirement funds, and opens up a broader range of investment opportunities.

Checkbook Control IRA LLC

Once your IRA LLC is established, a federal tax ID number is assigned to it. Next, a business checking account is opened, and the IRA funds are transferred to the LLC's account. Checkbook control offers the advantage of your being able to make investment decisions immediately, and to write a check for an investment without waiting for a custodians approval.

You can also write a check for expenses required for a real estate investment. For example, if a repair is required of a rental property, you simply write a check from the IRA LLC's checking account. There is no need to wait for custodian approval with a checkbook control IRA LLC. An additional advantage of the structure, is the avoidance of a custodian fee for the transactions made. Furthermore, if you own a 401K, you may have the option of rolling it over into the checkbook control IRA LLC when you retire.

There is no tax due on the gains the investment achieves, until you take a distribution. A checkbook control IRA LLC will require some personal responsibility, since there is no custodian to manage the specifics for you. The custodian will continue to have a role in overseeing the funds, and may charge an annual fee. However, no transaction fees are charged for the transaction you will be providing yourself.

Your Responsibilities

It will be up to you to learn and understand the market you choose to invest in.  You will also need to maintain a close eye on your portfolio, and on the market, in order to recognize new investment opportunities, or when to divest.


It is essential to have a thorough knowledge of all state laws, and the IRS rules that are associated with the IRA. An LLC is the same as any other business entity, and has the same responsibilities. If you are considering a checkbook LLC, give us a call for a no-obligation consultation to find out more about establishing a checkbook control IRA LLC.

The Process

John Worley, Attorney at Law can assist you to establish a checkbook control   IRA LLC. The process includes the following steps:

  1. Forming the LLC, drafting the Certificate of Formation and the Operating Agreement, and obtaining a federal tax identification number.
  2. Open a business checking account in the name of the LLC.
  3. Transfer the funds from your IRA to the new IRA LLC checking account.
  4. Invest in your chosen field, using the LLC's business checkbook.

Is it Right for You?

If you plan to invest in non-traditional investments routinely, and especially with assets that require fast payment, such as for real estate auctions, quick deeds and others, a checkbook control IRA LLC will greatly facilitate the transactions, ensuring you never miss out on a deal again.

Investment Options

Real Estate

Real estate is a popular choice for an IRA LLC, and includes rentals, foreclosures, tax liens and other. However, there are rules involved. For example, you cannot a property for personal use, or place the title in your name. The property is required to be titled to the LLC.  Maintenance and expenses must come from the IRA LLC account, it cannot come from your personal money. All gains remain tax free until you take a distribution. Ensure you know all the IRS rules and potential tax issues before using the checkbook control IRA LLC to purchase real estate. John Worley, Attorney at Law can assist you in setting up your IRA LLC and can provide the information you need for using a  checkbook control IRA LLC to purchase real estate.

Tax Liens

When property owners fail to pay the property taxes, the state, county or city government places a lien on the property. When investing in tax liens, you are paying the taxes owed to the government entity involved. The property itself is your security. However, each state and county may have different rules and procedures regarding foreclosure of the property. Once you sell or rent the property, all profits are deposited into the LLC bank account, and are tax deferred until you take a distribution.

Precious Metal and Coins

The IRS allows the investment of retirement funds in specific precious metals and coins. There are rules regarding investments that are required to be observed. For example, precious metals and coin investments are required to be secured in an approved depository, and cannot be stored in your home.

There are an abundance of investment options available for your checkbook control IRA LLC.  If you need additional information or help establishing a checkbook control LLC, or planning an investment strategy, call John Worley, Attorney at Law.

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