"Check Book IRA" | Ed Slott and Company, LLC

"Check Book IRA"

I am new to The Slott progran and the form. The following is an email that I got from a client of a previous firm. He mentions a " Checkbook IRA". This is new to me I would appreciate any help that I could get. Thanks ""I want to move my IRA funds from ************* to a new custodian that supports alternate investments (like investment real estate). I have not decided yet, but I may do this in conjunction with setting up a "retirement assets LLC". Just curious if this is something some one can help me with...I need specific expertise dealing with this type of IRA scenario.""

The major self directed IRA custodians are Pensco Trust, Guidant, Entrust and a few others. Basically, these custodians offer oversight in placing non traditional assets such as real estate, mortgages etc in your IRA, sometimes through an LLC. These self directed custodians represent a very small portion of the IRA market at present, but are growing. The central issue is that an IRA owner must avoid self dealing and certain other prohibited transactions which can result in the IRA being disqualified by the IRS with the balance considered distributed and taxable with the early withdrawal penalty. These alternative investments are loaded with situations that could potentially create such problems, therefore most people that opt to go this way are entering an area of complex requirements, most of which they are not going to understand, and they are accordingly forced to seek the custodian's help in many of the transactions that may be required such as foreclosures, court costs etc. Here is a link that explains the stuctural components of such an IRA etc. I am not sure you will really know all the downsides unless you can talk to a few dozen IRA owners who have gone down this path. http://www.checkbookira.com/

Thanks I appreciate the reply. Tom

If you are interested in a more reasonably priced alternative to http://www.checkbookira.com, visit my web site --> [url]http://www.nabersgroup.com[/url] Jeff Nabers
 

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