What is an IRA LLC (or Checkbook Control IRA)?

Download our getting started guide to learn more about IRA LLCs: https://directedira.com/beginners-guide-ira-llc/

In this episode of the Directed IRA Podcast, Mat Sorensen and Mark J. Kohler break down the Self-Directed IRA LLC, also known as the “Checkbook IRA LLC,” and explain how investors use it to buy real estate and alternative assets with greater control and flexibility.

They cover how the structure works, what you can and can’t do as manager of the LLC, common mistakes investors make, and why proper setup matters for staying compliant with IRS rules and protecting your retirement assets.

If you want to understand how experienced self-directed investors use IRA LLCs to simplify investing and protect their retirement wealth, this episode is a must-listen.

For questions or to learn more about this episode's topic, book a call with an IRA specialist here: https://directedira.com/appointment/

Other:

Mat Sorensen: https://matsorensen.com

Mark J. Kohler: https://markjkohler.com/ 

KKOS: https://kkoslawyers.com

Main Street Business https://mainstreetbusiness.com

Transcript

SPEAKER_01 0:06

Welcome everybody to the Directed IRA podcast. My name is Mark Kohler, and I'm here with the author of the third edition of the Self-Directed IRA handbook, the black label. I mean, it's kind of it's got a black cover. That's pretty cool. I gotta say, I was impressed with that.

SPEAKER_00 0:20

It's kind of like the black card now. You know, we got there by the time of the third edition. So yeah. So, and you can you can too for only 20 bucks. Get over to Amazon. By the way, it is the number one new release in the real estate category. Wow. The number two bestseller in real estate. The the book ahead of me is Brandon Turner's Rental Property Investing. I am top 10 in personal finance and retirement already. Wow. Um, Dave Ramsey and Susie Orman are right next to me, wow above me. So pretty good company. Yeah. It's selling. Keep bragging.

SPEAKER_01 0:52

Just go. Yeah, just go.

SPEAKER_00 0:54

I'm gonna I want to give you some.

SPEAKER_01 0:56

You know, I actually can't on the buying it. Yeah. You won't be alone. You are an intimidating force to reckon with. And uh I I actually came to the studio earlier early today and like checked the chairs to make sure I had the chair that was not the lower chair so that I didn't sit like I was at a little kid's table. I was really nervous about that again. It's hard enough being with you. You're so smart. So wow. Yeah, this is good.

SPEAKER_00 1:21

Learned it all from Arc J. Kohler.

What An IRA LLC Actually Is

SPEAKER_01 1:22

Yeah, well, okay. Well, today's topic is such a common topic. Do you have a whole chapter dedicated to this? Yeah, there's a whole chapter in the book. Not to me. What chapter number is it?

SPEAKER_00 1:32

I think it's chapter 13. Okay. You think IRA LLC.

SPEAKER_01 1:34

Okay.

SPEAKER_00 1:35

I mean, we can verify that if we need to.

SPEAKER_01 1:37

I mean, you know, your ghostwriter, you know. Yeah. No, so you have a whole chapter on this too. It's the self-directed IRA LLC, the checkbook LLC, the IRA LLC. I mean, whatever the flavor of the month is with someone trying to get into this market that we control and dominate, they're going to call it a sexy name to get you hopped up on this strategy. And the reality is we know it back. We created this strategy. We know this backwards and forward. We've been doing this for over 25 years of setting up these IRA LLCs. It is a LLC owned by your IRA.

Checkbook Control In Real Deals

SPEAKER_00 2:11

Yeah, plain and simple. Like your IRA owns an LLC 100%. And we've talked a lot about real estate deals, Mark and I have done. We talked about it on this with the last podcast episode you probably listened to from the summit. And so what's happening in the IRA LC is rather than my IRA owning the rental and the IRA is on the contract to purchase the property, the IRA is receiving the rental income and it's going to your IRA custodian. Like it's the check or the ACH or wires come in here to direct it. You're authorizing us to pay expenses from the IRA, or maybe your property manager. You can do that. You can own real estate that way. Nine out of 10 clients don't, though. That's administratively a pain in the butt for you and us. So what most clients are doing, what I've done with my own account, we advise our clients at KQS Stories, our sister law firm, is have your IRE own an LLC 100%. You don't own the LLC at all.

SPEAKER_01 3:02

But I can't be the manager, can I?

SPEAKER_00 3:04

You can be the manager, but you'll have restrictions, which we'll get to. The manager of the LLC is like president of the corporation. So your IRA owns the LLC 100%. You're just the manager, which means you can sign checks. You're gonna have a bank account in the name of the LLC. We're gonna invest cash from the IRA and the LLC.

SPEAKER_01 3:20

You know, I have a perfect example of this that just happened two hours before I got here today. I called Chris Alvin. We're on the final steps of selling a rental property. I've had in my HSA LLC, because see IRA LLC, 401k LLC, HSA, same thing, everybody. So my LLC is on 100% by my HSA. And he said, I've got your buyer. He agreed. I'm gonna have him send over the real estate purchase contract. And I said, Great, just email it over and I'll sign it as the manager of the LLC. I didn't have to call directed IRA. I didn't have to call any custodian or trust company. I he was just like, Yeah, I'll send that right over to you. You're the manager of the LC. I'm like, yeah, I got it. He's like, all right, I'll send it over. As soon as I sign it, he's like, okay, they should be funding it um before the end of the month. And uh just get me the ACH information on that LLC and we'll send the money right over to that LLC. Boom, bada bang. That's a technical term, by the way.

SPEAKER_00 4:19

Yeah, yeah. So the nice thing is you're kind of put in what some people call checkbook control. That's sometimes a label thrown on this structure because you have authority for the bank account of the LLC. You literally would have a checking account to send wires, to receive income, to cut checks. You even have a debit card to pay a vendor or a handyman that worked on the property, whatever you need. So you're functioning and doing all that stuff. Think about buying a property that you're doing a rehab on, right? Or you're gonna even flip the property and not even hold it. There's a lot of stuff happening there. It's so much easier to just do it out of the LLC. Maybe you're buying property at auction. You don't want to wait for your IRA custodian to send a check or get a cashier's check. You can do it right out of the LLC.

SPEAKER_01 5:03

Yeah, and you're gonna hear, I want to get gonna cut through all the crap you might hear out there is your trust company or custodian or whatever the hell, wherever your IRA may be. And after you hear this, you're going to again change, fire them, open your account over here, because we got you. Is you might hear, well, you can't be the manager of that LLC. That's prohibited. Wrong. That is their internal policy because they are so afraid of doing something wrong and they're terrible at education, they go to the extreme and say, no, you can't do that. No, yeah, you can. And we got you. We know how to set up the LLC. We do it here at the law firm, our sister company to directed IRA. So it's all done right. And you can be the manager of that LLC, and it is not prohibited. So do not listen to anybody that says you can't. Yeah. You can. And we'll tell you what you can't do, but the one thing you can do is be the manager, get the LLC set up, get the bank account opened, make sure the directed IRA coordinates the account number and how much money you're going to put in the LLC, and we'll we'll help do that whole process very affordably.

SPEAKER_00 6:11

Yeah. And I think even some of these old-timer companies in the space that are former broker dealers that do self-directed IRAs that can own real estate, they pretty much all let you do an IRA LC now. So there's only a couple left that are still holding on, like, oh, you can't do this. So it's been out there. There's cases on it. There's been some IRS kind of guidance on it. It's all in the book, of course. And and we advise you at the law firm. Like the the set cost to set up an IRL C where your IRA owns at 100% is$1,200. Your IRA can pay for that. You could personally pay for it however you want, but you're going to get an attorney setting this up, advising you, giving you a memo on how it's set up properly and how to maintain a property.

SPEAKER_01 6:55

I don't have attorney client privilege with them, do I?

SPEAKER_00 6:58

They're also a lawyer? Is that did I hear that? You know? Like the uh influencer you're getting medical advice from, is that a person, a doctor? Or I mean I don't have to.

SPEAKER_01 7:08

They're selling me supplements. Yeah. Apparently, you know. Uh no, I I I uh don't mean to take shots at very well-educated influencers and people that are helping people in their lives build wealth. I get it. It's just this is a lane where you want to have the right driver. You know, like get in, we're in this lane. We will make sure that the LLC is set up properly. You get a comfort letter, the do's and don'ts. We'd love you to buy a copy of Matt's book, the architect of how this works, so that you at night, when you're like, hey, I what was the what I got? I do I can't find that podcast where they were talking about this. Uh no, no, what do I do? You can just pull that book off the nightstand. Typically, you read it to fall asleep. But in this instance, you might want to get some info out of it. Was it did I really say that out loud? I'm sorry about that.

SPEAKER_00 7:56

It's cheaper than all those prescription drugs when people fall asleep. It's only 20 bucks, and and you can use it over and over again. Yeah, 1995 actually. Right. You don't even need a refill.

SPEAKER_01 8:05

Yeah.

SPEAKER_00 8:05

You know?

SPEAKER_01 8:07

I love it. So, yeah, there, no, but the the information is there to always back it up. Matt, I love Matt. How many footnotes do you have in your book?

SPEAKER_00 8:15

There's over a hundred citations to like tax court cases, internal revenue code, IRS guidance, you know. So, and that was what this industry was missing is the industry, the self-directed IR industry was missing a like authoritative guide on what you can and can't do. And us as lawyers, I mean, that's why I wrote the book because I was like struggling to like tell my clients what they could or couldn't do because no one took the time to research it and document it and check all the cases.

SPEAKER_01 8:38

So that's what we did.

SPEAKER_00 8:39

Yep.

SPEAKER_01 8:40

So let me tell you some of the things you can do with this, and then we'll get to the a few, literally. It's just a few of the things you can't. So here's some of the things I love that you can do with this. Once you set up the LLC funded with your IRA, HSA, whatever the hell you want to fund it with, a self-directed account here. And we and we'll go through these steps here too. I want to go through the steps. But once you get that account set up and that LLC rolling, you can again make those decisions on the fly, buying and selling, paying bills, paying vendors. Um you can put more money into the LLC through the IRA. I love that. Additional contributions are okay. And you were gonna say, what else could you do?

SPEAKER_00 9:20

Yeah, I mean, why was you saying leasing, managing, like going to the property, making sure a contractor fix it properly? We're not working on the property. You still can't work on it. You still got the primitive transaction rules. You got other, you know, other podcast episodes on that. The primitive transaction rules apply to your IRLC just the same. Yeah, but you're in this management and administrative function where you can just take care of stuff because you have the bank account. Oh, you can execute the transactions, yeah.

SPEAKER_01 9:44

And you don't have to set up a new LLC when you're done. You have to sell the, I'm gonna sell this property in Illinois, and then I can sit back and go, hmm, I'm gonna buy another property. I take the LLC and go buy it. At the end of the day, when I'm like done with the whole projects, uh, whatever number of projects I do, and the money's back in the bank account for the LLC, I can say, All right, directed IRA, I'm ready to close down this LLC, send all the money back to my IRA and start taking distributions tax-free if it's in a Roth, whatever. And uh, so you you you you don't have to do a new LLC if you change the assets in the LLC.

SPEAKER_00 10:20

Yeah. Just keep rolling. Yeah, and the LLC can own multiple assets, it could own multiple properties, it could do private lending. There's a lot of different things you can do with the IRLC. Like that's what mine does, actually.

SPEAKER_01 10:30

And I want to major make another major point that people don't talk about. It's really not talked about that often. Let's say you were the manager of a rental property you owned, and one of the tenants fell down, got hurt. If you owned it personally with no LLC at all, you know you're on the hook. What if you were the managing that project without an LLC as well? You'd be personally on the hook. And so when directed IRA is on title and you're making all those decisions as the manager of that property, yeah, I really feel you're gonna have some personal exposure. You're the one making the decisions on this. But what's the whole reason for an LLC in the first place? To protect the manager from their decision making and to protect the owner from something that could go wrong. So when you set up this IRA LLC, you're adding this layer of protection for you personally because you're the one making the call on this. So as long as you're making reasonable, not willfully negligent or reckless decisions, you're gonna be okay. That's what the purpose of the LLC is. And I don't think they talk about the asset protection. We just talk about the easiness.

SPEAKER_00 11:43

Yeah, yeah, definitely a huge benefit to that and making sure that all the other things you're trying to build in your life, you've got some, you've limited that risk to just that property or whatever's occurring in that LLC. So um now, a couple other things I want to make sure I understand. Because your IRA owns this LLC 100%, this is a single member LLC or sometimes called a disregarded entity. There's no tax return going to the IRS. Now you got to keep that LLC active with the state. Most states you might have an annual fee of 50 bucks or 100 bucks or 25 bucks. Arizona's zero, by the way. Yes, California has an$800 annual fee, minimum fee, 10 tax. So that varies state to state. Um, and the second thing is um you're never paying yourself from the LLC. Now, in the IRLC documents, you're gonna have an operating agreement. And every IRA custodian that does these is gonna look at the operating agreement and make sure that this operating agreement was set up properly, that it contains provisions for IRAs, that it's gonna have certain restrictions of what you can and can't do with it, because this is not an LLC operating agreement or structure that you're gonna own. Your IRA owns it. And the IRA is the custody, the IRA custodian is gonna have to approve this. So a couple things that'll be in there. One is you cannot pay yourself or another disqualified person, your spouse, your kids, your parents, a manager or take a salary. Now there was a guy who did that. His name was Ellis, and there's a tax court case called Ellis versus Commissioner. He was paying himself 30 grand a year to be the manager of his IRA LLC. He got audited. The IRS said that's a prohibit transaction. He fought it, he went to tax court, he lost, he appealed, he lost. It's clear, and we've been saying it even way before that case. Don't take money out of it and pay yourself a salary or any type of compensation. We're trying to build up the LLC, grow the value of the LLC, which is the asset your IRA owns. That's building your IRA. Don't try to take money from it personally, okay? That causes a prohibited transaction.

SPEAKER_01 13:33

Yeah, and some of you, some people that don't understand a case like LS will say, Well, the LLC was a problem. No, the LLC was not the problem. Yeah. And the problem wasn't that he couldn't be the manager. He just said, Well, I want to get paid for doing this. Well, now, some what the IRS is trying to prevent someone from doing this eking, you know, pulling out money out of their IRA through kind of a backdoor strategy. Like, well, I'll just be the manager. Then I can pay myself. That's how I'll get money out of the IRA. But the reality is they're actually hurting themselves financially. You want that IRA, hopefully a Roth IRA, to be snowballing. Why take out money along the way? Let it grow, build it. And especially a Roth IRA, you're you're gonna be able to pull that out tax-free anyway. Now you paid yourself. So now you've created income for yourself, and you think you're doing the right thing, and you're actually doing the worst thing. And so um just when you set this up, you'll you'll we're gonna walk you through those rules. That's one of the big ones. No sweat equity, don't pay yourself, run the show, go make some freaking money.

SPEAKER_00 14:40

Have it, it's it's so cool. Yeah, go do deals. And a lot of times it's easier to just to like do a deal, do it in the name of the LLC. Title companies understand it better. Other people in the business space or investment space just understand, oh, this is XYZ holdings LLC. This is, you know, they don't know that it's owned by your IRA. You're the manager of it going and doing deals. And so the goal is to go use that LLC and deploy it to investments, right? I've used my own IR LLC to own a single family rental. I've used it to do probably 10 to 15 private money loans. I've used it to own a private company in shares in a pr in a private company, or I just invested directly from the LLC at the LLC level. And so you can do all these different investments at the LLC level. Now remember, if I ever want to take money from this, I'm not gonna take a salary, I'm not gonna take a distribution from the LLC. I don't own the LLC. The IRA does. So I'm gonna send money from the LLC back to directed IRA that gets deposited my IRA account as a return on investment, and then I can take a distribution from the IRA. So if you're 59 and a half or later and you want to start living off of this, you can do that. We have many clients that do. They're just gonna send the money from the LLC back to the IRA, and then you take distributions from the IRA.

SPEAKER_01 15:54

All right. Now I'm gonna go into a very dangerous space. I'm gonna try to give the steps here quickly and easily sharing this platform with the godfather, the goat of this process who wrote the book on this. Yeah. So I'm gonna, I'm it's a dangerous space, but I I'm gonna take on the challenge. May I? Okay. I gotta try.

SPEAKER_00 16:15

And just can I just say this just because we've been saying how great I am to him? I mean, Mark Mark J. Coller is pretty freaking awesome too. Um, but let me just say this also. I'm pretty average outside of this. I'm good at this, okay? Outside of this, okay.

SPEAKER_01 16:30

All right. Well, you're so humble. I appreciate that. No, we're we all have our lanes, that's for sure. All right, so you didn't need to say all that, but you are a humble guy. I really are. Okay, now I'm gonna go through these steps and I'm gonna try to nail it here. If some of you are like, oh my gosh, I love this. I want to do this, I've got a project in mind, could be real estate, could be a crypto mine, you're gonna set up this IRA LLC to do all sorts of things and invest in whatever you know best. Number one, you're going to open a self-directed account, and you're gonna open it in the uh the type of account based on are you rolling money over from somewhere else? Is it gonna be a traditional IRA, a Roth IRA, whatever? And we've got podcasts on how to open an account. So, number one, open an account. Number two, you got to fund that account. I got to get some money in there from a new contribution or rollover or whatever. I'm gonna fund that account. Then third, I'm somewhere along there, you've decided this is the route you want to take. You want to start to open the LLC. Have that consult with the uh the law firm. You can get on the website with directed IRA, they'll help connect you. You can write in the show notes, you can go straight to KKOS lawyers and let the lawyer know I want to set up this IRA LLC. Let's get that ball rolling. Along the way, simultaneously, you'll decide on how much you want to fund this LLC. You want to put in 50 grand, 100 grand, how much you want to put in there, whatever it is. You're gonna decide that amount, and then you will fill out a direction of investment. I'm gonna tell my IRA people fund my LLC with X number of dollars. My LLC is getting set up. Here's how much I want to do. Send me the form. You can go right onto the dashboard at directed IRA and download the form, fill it out, and they'll say, okay, what's the account number for the bank account of this LLC?

SPEAKER_00 18:16

Yeah, which which, by the way, we set up for you. So we have this all integrated into one and seamless process. Yes, yes. I'm just breaking down the steps literally, you're like, yeah, these are the pieces that can are kind of happening behind the scenes. But yeah, I mean, you're opening the account, giving the intake information from the LLC, which is getting going over to KQS lawyers to set that up, which includes an attorney console and all this stuff. You know, we have malpractice insurance, all that. And um, it includes the authorization to that says, hey, this account that I'm setting up, I authorize it to be invested into XYZ Investments LLC, this new LLC I want you to set up. And then we automatically set up a bank account for you at Titan Bank, who's who we work with and they understand what IRL LCs are. If you go to your regular bank or credit union, big bank, community bank, and you're like, hey, I want to set up an IRLC checking account, you're gonna be there for like a long time. So make sure you're using a bank, and we have one that we just integrate in the process, but if you're not using them, make sure you use one that knows what the heck this is.

SPEAKER_01 19:17

Oh, yeah. And I want to say this too. The team and Matt's uh vision to make this easy for you is so critical on this point. Let's say you're buying a rental property in Georgia. You love Atlanta space, you're gonna go buy a rental property in Georgia, you've got a connection there, you're like, hey, I can fund this IRA LLC and do it. You're gonna need a Georgia LLC, a bank account set up in Georgia, or one of these national banks like Titan, which we dial in for you. That whole process used to put people into catharsis. You know, they're like, Well, like I got this LLC, now I gotta fly to Atlanta to open a bank account. I gotta go down to Wells Fargo, go through that nightmare in my local Wells Fargo, they're gonna send over a signature card. All that disaster alleviated. Titan Bank makes it seamless. New LLC set up properly for a Georgia investment with a Georgia property, and you're off to the races with this seamless process being made. At the end of the day, that once that money is funded into the LLC, you've got an online bank account with Titan, you've got a legit LLC in Georgia, in that example, and the money's there. And now this relationship you have in Georgia with your realtor, uh, some sort of real estate, or if it's a real estate deal, you can say, Yeah, I'm ready to go. I'm ready to write a check, quote unquote. And you're off to the races. Yeah. How do I do? Are those steps okay?

SPEAKER_00 20:43

Yeah, yeah. And I think um the the couple pieces here, just so you can keep everything on track. You can really get this done within two weeks. Now, I would say on average, this is more like a three-week process, um, because most clients are like, they they kind of stumble along a couple of steps. But if you're like, I want to get this done, let's go. I got a property I want to close on, you know, in 30 days. All right, easy, we can get that done. Okay. You go you go online. We have an exact IRLC account set up. You're gonna choose the account type you want to do. You're gonna enter in your information for the account. You know, who's your who gets your account when you die, you know. And we've got chat support help. Call us. We'll we'll stay on the phone with you through the whole damn thing. Yeah, our team will like do the application with you online. You're gonna input the name, what you want for the LLC. If you're like, I'm not sure on this or something. It's okay. You'll talk to an attorney about it in the next few days. You'll have an appointment with an actual, a real attorney going over your questions to get that LLC going. Now we've got to file that LLC with the state. Meanwhile, what's gonna happen is we open your account at directed IRA, the law firm's getting going on the LLC. You want to sign those documents so we can get them filed to the state quickly. Some states are, you know, we'll get it back within 24 hours. Some states are gonna sit on it for five days, okay? Business days. So there's always variation. We've got 50 different outcomes there. But while that LLC is going, Getting attorneys, getting the documents done, filing, waiting for the state, you sign it, yada yada. Is we want to get your account funded. You might have money over at Fidelity or at your local credit union or an old employer 401k plan. Well, we got to get that over here at directed IRA, because then we're going to invest it into this new LLC bank account. So in the at the same time, we want to get funding the account. And we have an entire team, that's all they do. It's called the funding team. And they will help you get your own. Hold on, they're called the funding team? The funding team. Okay. That's so complicated. Yeah. Yeah. And so they're going to get, but that's their job. That's all they do. And they know how to do this. This, this, you know, TD Ameritrade and Fidelity works. We'll accept an e-signature request to transfer money over. This provider doesn't. This one we have to do a what's called a uh medallion stamp. And we have all that stuff. We'll get it done. But what I'm saying here is like, don't do like one thing at a time. If you want to do the IRL C and you got a deal you're ready to go on, just get all the pieces rolling. Our team's here ready to help. And and within two weeks, you could really have an account set up, funded, LLC bank account, LLC set up, because we have it all coordinated here for all the parts.

Beyond Real Estate: Cattle Crypto Racehorses

Pricing Fees And Who Should Pay

SPEAKER_01 23:08

And I feel I need to say this too because we've you kind of use the real estate as an example. And that's probably the most common asset people are using the single member LLC for. But if you're a regular listener here, you know I set up a uh LLC just to own cattle. It was called the Kohler Dutton Livestock LLC. Remember that back in the day? Um, single member LLC in Idaho, and I bought six cows from a rancher with that LLC account. We kept them for about nine months to a year, fed them, blah, blah, blah, and sold them at the auction a year later. I made about 18% on the deal. Um, but the IRLC checkbook is what allowed me to pay for the cows, pay for the hay, pay the rancher. And then when the cows were sold, I went back into that LLC bank account. And then I put it back into my HSA and did a different deal. Another example is I have a crypto mine in one of my IRA LLCs. So for those of you that are into crypto, you may say, Oh, I want to fund some wallets, uh, do some things outside of the Gemini platform, which we have a crypto IRA, crypto HSA, crypto Roth, all of those. But if you're a little more creative in that space and you want to do some deals like crypto mining and you need an LLC for it, this is the process. Two weeks later, the money is in that LLC, and you can go off to the races. We have clients speaking of races, bought a racehorse with his IRA LLC. Uh, so again, you can do all of that in that LLC after it. Now, could we say cost? Like what should we want to give them a ballpark?

SPEAKER_00 24:43

Yeah,$1,200 for the IR LC. That's what KQS lawyers charges. Again, you have a lower. Such a good deal. Oh my gosh. Yeah, and then the self-directed IRA at directed IRA is$495. Then you have a$50 fee to make the investment into the LLC. But then from there, really the LLC is doing all the transactions. You still have your IRA account, you have an annual fee for the self-directed IRA. But otherwise, there's no other fees at directed because all the transactions are now happening at the LLC level. And you could own multiple assets. Many IRA custodians charge you per asset. We don't charge you on your first three. We charge you once you have four or more assets. But you could have, we have some clients that'll have like 50 different notes. They're private lenders that they have, they'll own 10 or 12 different properties in an IRA LLC and still just one flat 495.

SPEAKER_01 25:29

And I do want to say when you set up that IRA LLC, let's say the Georgia example, there'll be a Georgia state filing fee. Keep that in mind. That's true. And um, we'll want you to get that LLC on a company maintenance plan so that every year, you know, it's dialed in at Georgia, the filing fee and is paid and all that. That's a couple hundred bucks a year. Um, but I can't foresee anything. Now, who can pay for it? A lot of people ask that. So when I get going, I'm like, okay, guys, do I have to get the money out of Fidelity to do this? Well, how's the payment process work?

SPEAKER_00 26:00

Yeah, so you have two options. You can either have the IRA pay for it. And generally, what I say, if you have a traditional IRA, just let the IRA pay for it. You're gonna have to take a distribution of that money anyways and pay taxes. So this is an expense for your IRA. This LLC is being set up to benefit your IRA. So we can just invoice your um IRA at directed IRA. We didn't invoice that from our law firm at KQS Lawyers. Your IRA could pay the LLC setup fees. You could also have your IRA account fees paid by your IRA directly. Again, if you're a traditional IRA, you might want to do that. Now, a lot of our Roth clients don't like that because they're like, Matt, this is tax-free money. I want to let that compound. I don't want my fees to eat into this. Well, what you can do, and you can do this again, traditional Roth, you can do whatever you want. I'm just saying the strategic way to do it. For you Roth people, because we want every penny to be reinvested to compound and grow and tax-free dollars, I don't want to invoice your account. You can just pay with a credit card. You can personally pay your account fees any illegal fees for your IRA, which would include paying the law firm for the LLC. That's exempt from the primitive transaction rules. So you can personally pay those fees with your personal credit card if you wanted. Um, it's not deductible because it's not on a personal investment. It's for your IRA, but you could personally incur those expenses for your account fees and again for um the the fee to the law firm to set up the IRLC.

Workshops Resources CTA And Disclaimers

SPEAKER_01 27:18

And some of you may have thought, well, hold on, I thought investment expenses were a write-off. They used to be on the Schedule A before the Tax Cuts and Jobs Act, um, quote unquote simplified Schedule A and increased the standard deduction. That's where the the trade-off was. But yeah, you that uh it's you're allowed to pay for it personally, which I think is the more strategic thing to do. So you can compound that money in the retirement account, um, but it's not a write-off. Um, gosh, this this show turned out a lot better than I I thought. I got because I think this these steps, why, the benefits, what to look out for. People, you are ready to roll. Do you know you know 99% more than the average, or you know more than the 99% of accountants out there? I teach CPAs, enrolled agents, accountants, tax strategy in our Main Street Tax Pro program. If you're any of you're interested, get to partjkohler.com for that. If you're an accounting professional. But when they show up to get training, 99 out of 100 do not even know this. They're like, oh my gosh, I wish I would have known this. I could have been helping clients do this for years. And it just opens this whole new world to help clients that are really dissatisfied with the rate of return they're getting in their brokerage account for their 401k or IRA or whatever. So you're here because you know this. And uh, we just want to know we've got you. We understand the process. We've tried to simplify it. We love to see you succeed in this. We have our two workshops a year where you can get involved with the community. Our next one is in Orange County. Get it on your calendar, get your flights booked, and we've got our alt asset summit in Orange County.

SPEAKER_00 28:53

What October 22nd, 23rd, live and in person. We just had our self-directed IRA summit. You've probably heard about. We had over 200, 2,000 people registered for that, over a thousand people online.

SPEAKER_01 29:04

Biggest ever in the space.

SPEAKER_00 29:06

Yeah. And it was awesome. So, but we want to see you live. So don't delay, get your ticket. It will sell out. Yeah, assetsummit.com.

SPEAKER_01 29:12

I mean, I'm trying to get all my accountants in my training program to go there. They're gonna freaking hit it. So it'll be a great event. So book early, get there, bring your kids, bring your family, bring your spouse, guys. You you have an opportunity here to share this incredible discovery with the ones you love around you and help them, you know, exponentially grow their accounts. So yeah.

SPEAKER_00 29:38

Yeah. Well, hopefully this helped you understand what the heck is an IRA LLC or checkbook IRA, how to set it up and how to use it properly. We're here to be a resource for you. Let us know if we can help. We have a link below where you can book a call with directed IRA, speak to our team for free on how this can work for you, and we can get the ball rolling if it does. Get the account set up, get the consult set up with one of the attorneys, and you can start moving one step forward to taking control of your retirement. See you next time.

SPEAKER_01 30:03

And thank you everyone for listening. A quick disclaimer and reminder: this presentation does not constitute an attorney or CPA client relationship, and it is always in your best interest to consult competent legal and tax professionals when conducting your own personal transactions.

SPEAKER_00 30:20

We also want to make sure you know this is not investment advice or financial advice. We're just trying to give you education, ideas, and strategies you can take to your professionals or conduct your own research on. We'll see you next time.