ira owned llc

[Donna Curtiss]

I have an LLC, recently opened a self directed IRA. Can the IRA purchase my LLC? If not, how do I go about getting check book control of the IRA?

[Brian Eastman]

@Donna Curtiss

If you were to sell or gift the LLC to your IRA, that creates a prohibited transaction between you and the IRA. A LLC must be formed from the get-go with the IRA as the sole member. The LLC Operating Agreement needs to be drafted in such a manner as to convey certain IRS compliance language that will allow the IRA custodian to accept the LLC as an investment of your IRA. Not all IRA custodians accept the single-member LLC as an asset of the IRA.

There are two key components of the IRA LLC - setting up the plan and using the plan properly within the IRS guidelines.

Find a firm that specializes in this and that can offer you meaningful guidance after the initial setup.  Many such firms are active here on BP.  You should also consult with your licensed tax advisor before making such a move.