Yes, it’s a mouthful. But the Checkbook IRA LLC Operating Agreement sounds more complicated than it is. And when you have one properly set up in your IRA LLC, you can use a business checking account to make flexible investments within the tax-protected umbrella of your Self-Directed IRA. Sound like it’s worth doing? Great. Because once you understand the Checkbook IRA LLC Operating Agreement, you’ll see how easy it can be to set up an entirely new way of investing.

What is a Checkbook IRA LLC Operating Agreement?

First things first: what is this operating agreement? An operating agreement is a critical document when establishing your LLC. It outlines how the LLC will function. In this case, you’ll have a Single Member LLC for IRA investing purposes, so the operating agreement is typically much more straightforward than more complicated companies with partnerships and unique leadership structures. That’s why you shouldn’t feel intimidated at all when you have to set up your Single Member LLC.

When you establish an LLC with your state,  the Checkbook IRA LLC Operating Agreement will include critical information:

• The name of the company
• The primary purpose of the LLC (in this case, investing the funds of the IRA)
• Definitions, such as who the “manager” or “member” is
• Management and control, such as the manager responsibilities—like making investments and signing contracts on behalf of the LLC

In other words, this agreement lays out the reason the LLC exists and highlights the duty of the managing member. Your IRA will be the only holder of the LLC in this case, which simplifies the operating agreement. And once your IRA holds the LLC, you open a completely new way of investing: checkbook control.

What Can Investors Do With Self-Directed IRA Checkbook Control?

You might ask yourself at this point: why bother with these complicated-sounding “operating agreements” just to make some investments in your Self-Directed IRA? Isn’t it easy to direct your custodian to make purchases on your IRA’s behalf? Well, sure it is. And that’s often what we do here at American IRA—we help investors carry out the purchases and sales they want to make within their accounts.

But Self-Directed Checkbook IRA investing is different. When you have the checkbook of an LLC within your account, you have the power to make investments without working through the third party administration. In other words, there’s not any extra paperwork.

Let’s say you spot an opportunity for a great real estate investment. Your IRA needs to put down the money for the investment—but to do so, your IRA will have to beat out another buyer who has plenty of cash. Are you really going to wait for custodial approval in that situation? If you have a lot of experience in real estate investing, you might know that you have one chance to grab the opportunity. And with using a Checkbook Control IRA, you can do so without any administrative hassle.

The same rules still apply in retirement investing whether you’re using a Checkbook IRA or not. You’ll still have to maintain the good standing of your account by avoiding prohibited transactions. But the point is simple. With a Checkbook IRA, you’ll have more control than ever. You’ll be able to determine where your IRA funds go without extra administration. This means fewer long-term fees for maintaining the account. And it means a completely new way of looking at retirement investing.

Want to learn more about it works, and whether you need to think about that Checkbook IRA LLC Operating Agreement today? Contact American IRA at 866-7500-IRA.