ICO IRA's... Joe have you ever had this type of investment?
I like the idea of a check book.
I don't use an ICO IRA at this time, but here's what I know about it.
ICO is “I” for IRA, and the “CO” is for Company.
A self directed IRA’s ownership of an LLC is referred to as an “ICO”.
The use of a qualified IRA Custodian is required.
Set up of an LLC along with a very unique specialized operating agreement where you can operate as the Manager.
The "ICO" is an IRA-LLC that is a special purpose Limited Liability Company which is owned by a self directed Individual Retirement Account.
The IRA owns the ICO so the IRA funds can be transferred to the ICO in exchange for member shares or units of the ICO.
Traditional and non-traditional investments may be purchased by the ICO instead of in the IRA directly like real estate rental units or fixer-upper houses to buy and resell.
Also hard assets in precious metals, hard money lending, funding a business, trust deeds, and other investment can be used within the IRA Company.
The structure allows the IRA to have investments and a checkbook control over the IRA.
I’m thinking that’s one of the big drawing cards and selling features of the ICO IRA. Easy access to the funds for quick down payments on investment property deals that need to move quickly.
A big benefit is when the IRA ICO sells real estate or other investments.
The capital gains are deferred through the IRA like any other IRA investment.
Thus, 1031 exchanges are not necessary... A big advantage for buying and selling investment houses.
Custodian involvement is eliminated saving on large fees and specific time limits.
An ICO can use the IRA money to use as a down payment to buy real estate property and the ICO can finance or borrow the balance like a regular LLC. But the IRA itself can’t participate in the financing arrangement.
I have seen this program offered by Independent Associates and look to see if they’re a member of the National Association of Financial and Estate Planning – NAFEP.
Remember to do your “Annual Minutes” on the LLC,
I don’t know what documentation or special accounting goes with the IRA part.
It would be a study to understand it thoroughly, nor would I set this up after one presentation from an Independent Agent. I would consult my Attorney and CPA.
Disclaimer: I’m not selling any investment product although there may be advertisement on this site related to products and services for you to use for your further research and information gathering.
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