Using a Trust instead of an LLC with your Self-Direct IRA to gain checkbook control has a few disadvantages. Find out what a Trust is, what the cost differences are, and what the benefits of an LLC are.
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IRA Financial Group was founded by Adam Bergman, a former tax and ERISA attorney who worked at some of the largest law firms. During his years of practice, he noticed that many of his clients were not even aware that they can use an IRA or 401(K) plan to make alternative asset investments, such as real estate. He created IRA Financial to help educate retirement account holders about the benefits of self-directed retirement plan solutions.
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Everything related to the real estate has too be 100% "hands off" using a the Single member LLC/Checkbook IRA, how can you do real estate investing 100% hands off? It's nearly impossible unless you ho hire someone to do everything for you,,, (sounds expensive, probably more than the taxes you would be trying to avoid)
But the problem is the IRS does not allow the Checkbook IRA investor to do anything with tge real estate, you cannot touch it in anyway or you'll be in violation of some kind of rules potentially with huge penalties.
I'll add another reason for SMLLC over Grantor Trust: The trust is probably a Disqualified Person as to the IRA while the SMLLC is not even a "person" in the eyes of the IRS, much less a Disqualified Person. While the trust's status as a probable Disqualified Person is not automatically fatal, transactions between it and the IRA need to be examined and executed with care. Less of an issue with a SMLLC. I say the trust is "probably" a DP because it is indirectly 100% owned by the IRA owner, via the IRA. There's an argument to be made that "indirect" ownership at such a level is/is not "enough" ownership to make the trust a DP.
Interesting video! Wondering that whether I can store cryptos in my own hardware wallet that are purchased using self directed IRA funds?