Senior Housing and Assisted Living

People who use self directed IRAs can use the Limited Liability Company structure with their investments. This means that the account holder is accountable for his investments, not a custodian. The account holder manages his transactions by himself.

The reason self directed IRA account holders like using LLC structures is because it lowers fees and wait time. You don’t have to pay someone else to do the transaction for you. You can do it by yourself.

There is also a IRA tax deduction that happens when you use LLC. Self directed IRAs use limited liability companies because they are legal companies who have limits to their liability. They works as a combination between corporate businesses and partnership businesses.

Swanson VS Commissioner was a case that won the right to make transactions for your IRA through LLC. In 1996 a case won that granted investors the right to pass their profits through the LLC on to their IRA investments. LLCs received tax favorable treatment, just as IRAs did.

Some people feel that the case should not be valid. LLCs can sometimes use checkbook control systems. Checkbook control systems usually only have one person in charge – the account holder.

If you only have one person who has the authority for the LLC it is hard for anyone else to get things accomplished. Usually people who are unhappy with the method are custodians. There are other mandates that do not use the custodian, however, so most validity cases don’t have much backing behind them.

A Limited Liability Company is a business entity. Contrary to similar characteristics, LLC is not known as a corporation. It is actually known for being an unincorporated association.

It is often mistaken as a corporation because of the limited liability it has. However, it also shares a pass-through income taxation that is shared with partnership businesses. These are the reasons why they work as a combination between partnership and corporate businesses.

NAFEP (The National Association of Financial and Estate Planning) is a leading provider of self directed IRA and self directed 401k products, administrative and custodial services.