What is A Checkbook IRA?

A Checkbook IRA generally refers to a self-directed IRA that holds an ownership interest in an IRA-owned limited liability company (LLC). The LLC typically maintains its own bank account, allowing its authorized manager to make eligible asset purchases and pay expenses directly using LLC funds.

Mountain West IRA provides administrative and recordkeeping services for the IRA but does not manage the LLC, approve its individual transactions, or oversee its day-to-day activities. All transactions must comply with applicable IRS rules, including prohibited transaction requirements.

Understanding Checkbook Control

A Checkbook IRA structure allows certain transactions and expenses to be managed directly through an IRA-owned LLC.

Direct Transaction Management: The LLC's authorized manager may make eligible asset purchases and payments using LLC funds.
LLC-Level Transactions: Certain transactions may be completed through the LLC without submitting individual purchase instructions to Mountain West IRA.
Eligible Assets: An IRA-owned LLC may hold certain allowable alternative assets, subject to applicable requirements.
Recordkeeping Responsibilities: The LLC manager is responsible for maintaining accurate records of transactions, assets, income, and expenses.

How a Checkbook IRA Is Established & Funded

Checkbook IRA structures involve additional legal, tax, and prohibited transaction considerations. Mountain West IRA provides administrative and recordkeeping services for the IRA but does not establish, manage, or oversee the LLC or its individual transactions. Account owners should consult qualified legal and tax professionals before establishing an IRA-owned LLC.

The general process for establishing and funding a Checkbook IRA is outlined below:
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Open & Fund Your Self-Directed IRA: Establish a self-directed IRA with Mountain West IRA and fund it through an eligible transfer, rollover, or contribution.
Establish the LLC: Work with a qualified legal professional to establish the LLC, including its Operating Agreement, state registration, tax identification number, and LLC bank account. The LLC must be structured appropriately for IRA ownership.
Complete & Submit Purchase Instructions: Complete and sign Mountain West IRA's Private Placement Purchase Kit. Review the subscription agreement and applicable LLC documents, marking them "Read and Approved" with your signature and date before submitting them to Mountain West IRA. The documents must identify your IRA as the investor. Do not sign as the investor, as Mountain West IRA signs on behalf of the IRA. Include the required LLC formation documents, Operating Agreement, tax identification confirmation, and supporting information.
‍Transactions Department
Phone: 208-510-0859
Email: transactions@mwira.com‍
Administrative Review & Funding: Mountain West IRA reviews the submitted documentation for administrative requirements and coordinates any necessary corrections. Once all requirements are satisfied, an authorized signer executes applicable documents on behalf of the IRA. Complete and correct documentation must be received at least three business days before the requested funding date. Mountain West IRA then processes the authorized transfer of IRA funds to the LLC's bank account at the account owner's direction.
Manage LLC Transactions: Once funded, the LLC's authorized manager is responsible for eligible asset purchases, expenses, and recordkeeping in accordance with applicable requirements. Mountain West IRA provides administrative and recordkeeping services for the IRA but does not oversee the LLC's individual transactions.

Getting Started With your self-directed IRA

Follow the steps below to establish and fund your self-directed IRA, submit asset purchase instructions, and understand ongoing account requirements.

Complete Your Starter Kit. Select the appropriate account application below. To request electronic signature documents, email accounts@mwira.com or call 208-314-2580.

Traditional IRA Starter Kit

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Roth IRA Starter Kit

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SEP Starter Kit

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Individual 401(k) Plan Starter Kit

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SIMPLE IRA Starter Kit

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Health Savings Account (HSA) Starter Kit

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Traditional IRA Starter Kit

PDF Download

Roth IRA Starter Kit

PDF Download

SEP Starter Kit

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SIMPLE IRA Starter Kit

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Precious Metals Foreign Currency Starter Kit

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Individual 401(k) Plan Starter Kit

PDF Download

Health Savings Account (HSA) Starter Kit

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Fund Your Account. Fund your account through an eligible transfer, rollover, or contribution, depending on the account type and your circumstances.

Submit Your Purchase Instructions. Complete the appropriate transaction forms and provide any required supporting documentation to Mountain West IRA for administrative review.

Maintain Your Asset. Any income or proceeds generated by IRA-owned assets must be deposited into the IRA, and eligible asset-related expenses must be paid from IRA funds. Mountain West IRA provides ongoing administrative and recordkeeping services and processes authorized transactions at the direction of the account owner.

Understanding Checkbook Control in a Self-Directed IRA

A Checkbook IRA typically involves an IRA-owned LLC with its own bank account. The LLC's authorized manager may make eligible asset purchases and pay expenses directly using LLC funds without submitting each individual transaction to Mountain West IRA for processing.

With this flexibility comes additional responsibility. The LLC's authorized manager is responsible for managing transactions, maintaining accurate records, and ensuring compliance with applicable IRS rules, including prohibited transaction requirements.

Mountain West IRA provides administrative and recordkeeping services for the IRA but does not manage or oversee the LLC's individual transactions.

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Important Rules & Considerations

Prohibited Transactions: The IRA-owned LLC must comply with applicable prohibited transaction and disqualified person rules.
Personal Use: LLC funds and assets cannot be used for the personal benefit of the account owner or other disqualified persons.
Compensation: Account owners should not receive compensation for managing their IRA-owned LLC.
Recordkeeping: Maintain accurate records of LLC transactions, income, expenses, and supporting documentation.
Tax Considerations: Certain activities, including business operations or debt-financed assets, may result in Unrelated Business Taxable Income (UBTI) or Unrelated Debt-Financed Income (UDFI).

Why Choose Mountain West IRA?

Experience Since 2006: Providing self-directed retirement account administration and recordkeeping services since 2006.

Client-Directed Administration: You choose the assets held within your account. We process transactions at your direction and maintain account records.

Alternative Asset Experience: Our team has experience administering accounts that hold a wide range of allowable alternative assets.

Educational Resources: Access guides, videos, webinars, and other resources to better understand self-directed retirement accounts.

Personalized Support: Get responsive assistance with account establishment, administration, and transaction processing.

Frequently Asked Questions

What is a Checkbook IRA?

A Checkbook IRA is a self-directed IRA that typically holds an ownership interest in a limited liability company (LLC). The LLC maintains its own bank account, allowing its authorized manager to make eligible asset purchases and pay expenses directly using LLC funds.

Mountain West IRA administers the IRA but does not manage the LLC or oversee its individual transactions. All activity must comply with applicable IRS rules, including prohibited transaction requirements.A Checkbook IRA is a self-directed IRA that typically holds an ownership interest in an LLC managed by the account owner. The LLC maintains its own bank account, allowing its manager to make certain asset purchases and pay expenses directly using LLC funds.

What Are The Risks Of A Checkbook IRA?

A Checkbook IRA involves additional responsibilities for managing LLC transactions, maintaining accurate records, and complying with IRS requirements. Prohibited transactions, improper use of IRA-owned funds, or inadequate recordkeeping can result in significant tax consequences, including potential loss of the IRA's tax-advantaged status.

Account owners should consult qualified tax and legal professionals before establishing or operating an IRA-owned LLC.