However, there are many ways in which you can invest your IRA and not be in violation of the prohibited transaction law. In other words, there can be no “self-dealing” transactions. Your IRA must benefit, rather than benefiting you, personally. In plain English, prohibited transactions are those transactions that violate the basic intent of the IRA. (4) investing in a prohibited investment. (3) loaning money to a disqualified person or (2) benefiting someone other than the IRA (1) doing business with a disqualified person Prohibited transactions generally involve one of the following: IRC 4975 is the section that lays out the rules on prohibited transactions. Disqualified persons include your fiduciary and members or your family (spouse, ancestor, linear descendant, and any spouse of linear descendant).” – IRS Publication 590 “Generally, a prohibited transaction is any improper use of your IRA account or annuity by you, your beneficiary or any disqualified person. The IRS defines a prohibited transaction as follows: Understanding what constitutes a prohibited transaction is very important when it comes to making investments within your IRA. Thus, there is more money for your retirement, which is the whole goal of an IRA. With the CHECK BOOK IRA, LLC, your IRA will be subject to fewer and lower fees from the custodian.

This ensures that your IRA is able to make the best investments at the best prices. With the CHECK BOOK IRA, LLC, you have the checkbook, the authority to write the checks and can make an investment without time delays. Think of tax liens, tax deeds and foreclosures sold on the courthouse steps you need to have checkbook control or you miss out. And what Real Estate deal that aren’t time sensitive? If you don’t move quickly, you will miss out on the best deals. Further, with any time sensitive investment, it puts you at a huge disadvantage. This is problematic, unnecessary and annoying. With a self-directed custodian, you get more control than you get with a traditional custodian, but you still have to get permission from the custodian for every little thing you do. You can only receive true checkbook control with the CHECK BOOK IRA, LLC. They would financially suffer if you make a move so they aren’t going to tell you about it. It is just likely you can’t do it through your current custodian. Although those custodians/brokers may not allow it, it can be done. But those are ignorant and self-serving responses. However, when they ask their current custodians / brokers, they are typically told that such investments are illegal, too complicated or that it can’t be done. They often want more tangible investments such as Real Estate. After the steep stock market decline, corporate scandals and corruption (e.g. Enron, ImClone, Worldcom) and many investors seeing their retirement accounts cut in half, they are ready to take control of their own investments. Why would they want to let you know of alternatives that they wouldn’t benefit from?Īs investors have become more disillusioned and frustrated with traditional investment choices, they have begun looking for alternatives.

The traditional investment community has had control of over 97% percent of retirement accounts, and they have been making a great living off your accounts. As a consequence, and unfortunately for many investors, it has been a well-kept secret that they have other options for their IRAs. At a bank, you may be limited to CDs, while at a brokerage firm you will be limited to stocks, bonds and mutual funds. Who would tell you? Your stock broker? They will only let you invest your IRA in investments that their firm offers.

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