Frequently Asked Questions

What are the rules to avoid when operating an IRA LLC?

Operating an IRA LLC, or a self-directed Individual Retirement Account Limited Liability Company, can be a beneficial way to manage your retirement assets, especially if you're interested in non-traditional investments. However, there are certain rules that you must strictly adhere to in order to avoid penalties and maintain the integrity of your IRA LLC. One of the most important rules to avoid violating is engaging in prohibited transactions. These include the IRA LLC paying money to the owner or any member of the owner's family. The IRA LLC is also prohibited from distributing or selling property to the owner or any family member. This means that the business cannot give away or sell its property to the owner or their family. Another rule to avoid breaking is allowing the owner or any family member to use property that belongs to the IRA LLC. For instance, they cannot live at the investment property that is owned by the business. Additionally, the IRA LLC owner and family members are not allowed to provide services to the business. This includes not being able to pay the expenses of the business.