Purchasing non-traditional assets with a self-directed IRA can help individuals diversify their investments, which may guard retirement portfolios against economic changes. Investing in LLCs and trusts is one of the many options available with a self-directed IRA.
An LLC is a legal organization that provides the tax advantages of a partnership while limiting the legal liability of the individual partners in the same way a corporation does. Forming an LLC can be a great way to partner in purchasing investments.
Common reasons LLCs are used in self-directed accounts:
- Small groups of investors to pool funds together.
- Good option for families or business partners.
- Investors have multiple transactions (rental property, rehab work, many expenses).
- Checkbook control
Watch this video to learn more about investing in multi-member LLCs using your self-directed IRA