Private company investing – equity capital that is not publicly traded – has fueled America’s economic growth. Infused by direct investments, immensely profitable successes like Google, Apple, and Microsoft were once private entities that have grown to public icon status.
Innovative entrepreneurs armed with their proven business models often seek growth capital to expand their operations. As a Vantage Self-Directed IRA investor, you have the freedom to invest in private companies that you are passionate about and to enjoy the tax-free profits generated by their competitive advantages.
Structures used to invest in private companies with an IRA include, but are not limited to, Limited Liability Companies (LLCs), Limited Partnerships (LPs), and C-Corporations (C-Corps). Because each business structure has unique advantages and disadvantages, we strongly encourage you to consult with the appropriate professionals to determine the structure(s) that best meet your unique investing and retirement planning needs.
- Attorney Prepares legal documents to facilitate transactions and can advise you on legal matters
- Paralegal/Document Preparer Prepares legal documents; not licensed to practice law and therefore unable to provide legal advice
- IRS Will provide you with a Tax ID for your new company
- Private Investment Manager/Director Professional who offers an investment and/or is responsible for raising equity or debt capital from private investors, and managing the entity
- Checkbook Control IRA LLCs – Could potentially reduce the amount of Administrator’s fees, increase timeliness of investment transactions, and offer you more control over your assets; requires clear understanding of structure implications and Manager responsibility for recordkeeping to avoid Prohibited Transactions outlined under Internal Revenue Code Section 4975
- Accounting is done by the LLC Manager or the company advisors
- You cannot invest in a business that you personally own/manage, or earn a salary from a business your IRA is invested in
- Property specific expenses and income must be paid and received by the IRA in direct proportion to the ownership percentages initially established
- Active operating companies and obtaining leverage through the company may present the potential for Unrelated Business Income Tax (UBIT) or Unrelated Debt Finance Income Tax (UDFI)
- Fair Market Valuation of the units/shares of company held within your IRA, with substantiation, must be provided to Vantage on an annual basis
- Units/Shares must be titled/vested in the name of your IRA, not your individual name, and in direct proportion to the IRA’s ownership percentage
DISCLAIMER: Vantage Self-Directed Retirement Plans does not offer investment, tax, financial, or legal advice nor do we endorse any products, investments, or companies that offer such advice and/or investments. All parties are strongly encouraged to perform their own due diligence and consult with the appropriate professional(s) licensed in that area before entering into any type of investment.