American IRA CEO, Jim Hitt
Investing in LLCs can be a powerful way to build wealth quickly. An LLC that quickly grows in value can be a tremendous asset to anyone who invests in such a private company with their Self-Directed IRA.
Charlotte, NC (PRWEB) August 28, 2017
Retirement investors can use a Self-Directed IRA to invest in private LLCs. But Jim Hitt, CEO of American IRA, recently posted an article at the American IRA blog that explained that many investors make mistakes when holding an LLC within their IRA—and how these mistakes can best be avoided.
Jim Hitt began by noting that investing in LLCs can be a powerful way to build wealth quickly. An LLC that quickly grows in value can be a tremendous asset to anyone who invests in such a private company with their Self-Directed IRA. This allows for tax protections on the growth in wealth that occurs within the account. But Jim Hitt was also quick to warn that investors frequently make mistakes with holding an LLC in their IRA.
For starters, Jim Hitt warns, it’s a bad idea to try and pay oneself through the LLC in the retirement account—unless taking a distribution. Otherwise, this transaction would be a violation of the rules regulating Self-Directed IRAs and could land investors in hot water. “Investors should try to view the IRA as its own entity,” said Jim Hitt. “You’re not using the IRA to get rich now. The IRA is being used to get itself rich—and when retirement comes, you can then take the distributions you need on a legal basis.”
Another frequent mistake, Hitt argues, is that of failing to properly draft an operating agreement. An operating agreement helps determine the flow of command and work at an LLC. Without a proper operating agreement in place, it can be difficult to predict exactly who will take care of what—which in turn leads to a lack of direction for the LLC itself.
Jim Hitt also says investors need to pay attention to all the key tax forms present and required for LLCs. “You have to make sure you meet all of your responsibilities,” says Jim Hitt. “This LLC is in your account, but it’s also an LLC with its own requirements and obligations.”
Hitt recommended working with a Self-Directed IRA administration firm in order to make sense of all the paperwork and regulations regarding LLCs within IRAs.
About:
American IRA, LLC was established in 2004 by James C. Hitt in Asheville, NC.
The mission of American IRA is to provide the highest level of customer service in the self-directed retirement industry. Mr. Hitt and his team have grown the company to over $250 million in assets under administration by educating the public that their self-directed IRA account can invest in a variety of assets such as real estate, private lending, limited liability companies, precious metals and much more.
As a self-directed IRA administrator they are a neutral third party. They do not make any recommendations to any person or entity associated with investments of any type (including financial representatives, investment promoters or companies, or employees, agents or representatives associated with these firms). They are not responsible for and are not bound by any statements, representations, warranties or agreements made by any such person or entity and do not provide any recommendation on the quality profitability or reputability of any investment, individual or company. The term "they" refers to American IRA, located in Asheville, NC.
