Why am I using an LLC within the Self-Directed IRA to hold my assets? Can I use Rocket Dollar's custodian?

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By using your own LLC within your IRA account, you are eliminating the frustrating back and forth conversation and retaining more control over the investment decision-making and execution process.


At the end of the day, someone or something has to hold your investment.

When you directly own an alternative asset in your IRA, it must be held with a non-bank trustee or custodian. Both traditional and self-directed custodians will only hold an asset for you as long as it is approved by their investment team. Once approved, the custodian will place its name on the investment for your retirement account's benefit.

In the Rocket Dollar model, your LLC reviews execute and hold the investment directly. There is no other party that can interfere.


Relying on others to approve your deal can put you and your assets in a bind.

Self-directed custodians are experienced in holding a more extensive variety of assets but can enforce an extensive deal review process if they directly hold assets for you. These can be frustrating, holding up your own investment objectives and delaying the completion of your retirement account’s investment goals.

A custodian’s deal review process is not intended to provide you with fiduciary advice, but rather to protect their own business interests. Your deal may be rejected because the custodian finds it too cumbersome for their service processes, not because it violates IRS guidelines.

Issues such as Fair Market Value (FMV) and other maintenance items can provide friction with a custodian, whereas the LLC model truly empowers you to control the portfolio.


An LLC makes it easier to wire money and manage your investments

While managing your investments, you will occasionally need to move funds. These transactions could be for new investment, ongoing expenses, or capital calls. Your LLC business bank account will make it simple to execute these transactions, without the constant review hassle imposed by most self-directed custodians.


Business Protections

Your Rocket Dollar LLC is set up in Colorado. If you are running your IRA LLC investments like a business, you could see some protections under Colorado Law and the state that you are running the business in. If your IRA investments are close to a business OR is renting, Rocket Dollar requires that you should always register your Colorado LLC in the state that the business activity or rental is in. 

This means that you could be subject to the laws of business and business protections of Colorado and the other state. Keep in mind that renter/tenant/customer protections could still apply depending on the state. 

You should also be aware of UBIT (Unrelated Business Income Tax) and UDFI (Unrelated Debt-Financed Income Tax)

This is not legal advice and is educational only. For business cases, consult a lawyer in your investment field or you can contact Rocket Dollar sales and partnerships to be referred to an expert CPA or Lawyer.  1 855-762-5383 


What about up-keeping my LLC?

Your monthly fee will help upkeep your Colorado LLC that Rocket Dollar creates for you. There is not another yearly additional fee for up-keeping the LLC. 


What if I'm from California?

Rocket Dollar offers a direct held Self-Directed IRA product with a partner custodian for California residents. Sometimes forgoing the LLC and checkbook control is worth saving $800 a year in taxes to the state of California. For more on purchasing or structuring your California Self-Directed IRA, click here.

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