Why Do You Need an LLC for a Self Directed IRA?

Why do you need an LLC for a selfdirected IRA

Many self-directed IRA investors opt to establish an LLC for their IRA assets as it offers several advantages, such as checkbook control and reduced annual fees at custodians who charge per-asset fees.

An IRA LLC provides limited liability protection and privacy from public disclosure. However, it’s essential to abide by IRS rules regarding prohibited transactions and disqualified parties.

Limited Liability Protection

Self-Directed IRAs that own LLCs provide your Self-Directed IRA with greater “checkbook control.” An LLC will allow your Self-Directed IRA to make investments faster without waiting for custodian approval and any associated fees to take action on investments as quickly as possible.

An LLC provides your personal assets with extra protection by legally segregating them from those of the LLC, shielding your personal assets from being used against you in case any legal actions against it arise.

IRAs allow investors to invest in any type of property through an LLC, from residential and commercial real estate, raw land and lease options for single family to multi-family dwellings – you can write a check directly from the LLC checking account to make purchases – provided all procedures are followed to avoid IRS penalties and prohibited transactions, disqualified persons or prohibited actions from occurring. Furthermore, you’ll require having an IRA-owned LLC set up and managed by a qualified professional so all rules regarding an IRA account are followed strictly.

Tax Benefits

LLC structures offer their IRA owners the flexibility of investing in various assets including real estate. An LLC-IRA may be used to purchase single-family homes, building lots and raw land as well as contracts for sale or lease options.

An IRA LLC gives the holder “checkbook control.” This means he or she can make investments without the need for custodian approval and fee structures – ideal for investing opportunities that require hands-on activity like purchasing foreclosure properties or short-term flipping investments.

An IRA LLC may also help to streamline recordkeeping, tax filings and administrative fees. This is particularly advantageous for investors with multiple SDIRA investments spread out among several states or jurisdictions; using an LLC as their investment manager helps streamline these operations while streamlining records while decreasing annual account maintenance fees.


Self-directed IRA LLCs allow for increased control and flexibility when investing in alternative assets like real estate. An LLC owner, as manager of their IRA account, can write checks directly into investments without waiting for approval or transaction fees from their custodian, which can be particularly advantageous when an opportunity presents itself quickly.

An LLC gives the IRA owner signing authority over contracts and access to an LLC business checking account for more easily financing transactions and expenses relating to investment assets – this is particularly advantageous in real estate investments but applies across other forms of investments too.

Talk to a SmartAsset financial advisor to gain more insight into the advantages of an LLC for your self directed IRA. Our free tool connects you with pre-vetted advisors in your area at no additional cost – get started now.


An LLC allows you to make non-traditional investments without giving the custodian details on each purchase – this can be especially helpful when investing in real estate and acquiring alternative assets like precious metals.

Utilizing an LLC gives the IRA owner privacy as purchases will be made under its name rather than individual account holder’s. Furthermore, using an LLC saves on transaction fees.

If you are thinking about opening an IRA LLC for checkbook control and other benefits, Entrust can assist in setting it up and opening your checking account. All that is needed to start is providing our IRA administrator with your LLC operating agreement and investment request form – then contact us using either the number on this page or our inquiry form and one of our knowledgeable consultants can discuss all aspects of this process with you.

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