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Checkbook Control IRA

Checkbook Control IRA

What is a “checkbook control” IRA?

A checkbook control IRA refers to a method of investing, where your retirement account funds into a single-member LLC that the IRA account holder manages.  The account holder can write checks and fund investments directly out of the bank account associated with the LLC.


What are the risks of checkbook control?

Difficulty in Mastering the Rules

Adding in a layer of using an LLC does not eliminate the rules surrounding Self-Directed IRAs.  The guidelines for these accounts can be complex and could create difficulty in properly managing and investing this account.  Especially as legislative changes occur, it can become cumbersome for an investor to stay up to date on the current regulations.

Engaging in Prohibited Transactions

Due to the complexities of the disqualified persons and prohibited transactions rules, there is a risk of inadvertently engaging in a prohibited transaction.

Tax Consequences or Penalties if Improperly Used

The tax consequences and penalties for engaging in prohibited transactions can be significant, possibly eliminating the full balance of your IRA.  Your full IRA balance can be put at risk, as well as additional penalties if a prohibited transaction occurs.

Higher Chance for Audits

Due to the nature of these accounts and the unfettered access that they can provide, there is annual reporting done by an IRA custodian who holds these accounts to the IRS and for these types of accounts could lead to a higher chance for audits.

How does Quest Trust Company mitigate risk for our clients?  

  • 24-48 Hour Funding of Transactions 
  • Ease of Use Via the Client Portal 
  • Competitive and Transparent Fees 
  • Educational Consultations with a Certified IRA Specialist 
  • Webinars, Blogs, and Educational Content 

For more information, read our blog articles:

Redefining Checkbook Control - Quest Trust Company

Checkbook Control IRA-Owned LLCs Risks - Quest Trust Company

Have Questions?

Talk to a certified IRA Specialist. Schedule a 1-on-1 consultation today!

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