IRA LLC
I was recently asked by a lawyer about IRA LLCs. His client is adiment about setting up an IRA LLC for privacy purposes and that he has checkbook authority and complete control. He plans on buying precious metals within the IRA LLC. His question was who does he use custodian wise for something like this? Do most custodians have this capability? Since this was my first time of getting a question regarding an IRA LLC, my question is what is the real benefit of setting something like this up? It seems to me that the IRA LLC might be too complex of a solution for his needs.
Permalink Submitted by mk foss on Mon, 2013-06-03 19:03
It is possible for an IRA to be an LLC Member but it is difficult to do so and avoid Unrelated Business Income or IRA disqualification. Custodians who handle this type of IRA investment tend to charge more than other custodians and also do not take much responsibility for things going well. An IRA can only invest in coins and bullion if those items are in the physical possession of a trustee. An IRA cannot invest in precious metals. I don’t think that puting an LLC between the IRA owner and those investments is sufficient protection. When an IRA invests in collectibles like coins,gems or precious metals the amount invested is treated as a distribution from the account. I’m not seeing the benefit of using an LLC.