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Direct Register Shares from an IRA

How to DRS an IRA by setting up an IRA LLC

In this guide we provide the step by step DIY process to set up your IRA LLC. This can be applied to any SDIRA custodian willing to hold “alternative assets” (AKA stocks/shares).

One custodian we are aware of that has made an effort to help people set up their IRA LLCs in such a way, is IRA Financial Trust. They do not work with any brokers, so the only way to hold stock investments with them is through your own LLC.

 

IRA Financial offer a complete IRA LLC setup, which includes: The LLC, Articles, Operating Agreement, EIN, and state fling. The LLC will be direct registered in Computershare, with you - the individual investor - as the LLC Manager. Giving you complete control of the LLC with no broker involvement or access at all.

Please Note: Although you have complete control over the LLC, if you wish to buy or sell shares in your IRA you will have to go through the custodian still (in this case, IRA Financial Trust). It is a multi-step process that involves: 1. A purchase or sales form is emailed to you from IRA Financial Trust. 2. You complete the form and send it back to IRA Financial Trust. 3. They then pass the form on to Computershare. 4. Computershare then acknowledge the validity of the form and then buy or sell the stock(s) as directed.

IRA Financial's one time IRA LLC setup fee is $400 for all states except TX, TN, MASS, and CA which is $600. (reduced from $999).

To learn how to do it yourself with any IRA custodian, you can follow the guide below.

The DIY route:

  • Find a non-broker custodian willing to hold “alternative assets” specifically, a Limited Liability Company (LLC).

  • Form an LLC with your state for investment holdings. There are companies who can take care of this entire setup for a fee, or you can DIY. Like anything, the DIY route can save money, but takes more time and research. If you choose a paid IRA LLC setup service, skip to "Once your IRA LLC account is set up".

  • The LLC filing process and cost varies by state, but is generally done through each state’s “Department of Financial Institutions” and can usually be done online.

  • Apply for an Employer Identification Number (EIN) online directly with the IRS here.

  • Drafting your IRA LLC Operating Agreement will need to include specific wording as it relates to IRAs, so this part may be best to hire a professional such as a tax attorney, CPA or specialized service.

  • Request and submit an application to your new non-broker custodian for an IRA that can invest in “alternative assets” including LLCs. This often requires legal descriptions of your LLC, such as Articles of Organization (from your state filing), Operating Agreement and Subscription documents (professionally drafted).

  • Follow your custodian’s instructions for funding your IRA LLC via a “Purchase Authorization” which essentially means you deposit money into your new IRA, and the IRA “buys” 100% ownership of the LLC you just set up.

  • Once your IRA LLC account is set up, you can use a Letter of Instruction to transfer your shares from your broker IRA directly to DRS at Computershare in the name of your IRA LLC, or your non-broker custodian may be able to make this transfer and DRS for you.

  • Keep in mind it will be your responsibility, as Manager of your IRA LLC, to report all transactions in and out of your IRA LLC account according to your LLC Operating Agreement.

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