What does the Checkbook IRA Cost?

Do not pay more than $3,000 for a turn-key solution!

The Simple Solution is probably what the majority of our the clients need. This is a list of custodians with web links that specialize in Self Directed IRAs which also allow real estate investments.

The “Turn Key Solution” is prepared by an attorney / CPA group and is recommended for anyone with complex transactions including foreign investments. It includes an important “Opinion Letter” that will prevent the IRS from accessing penalties as long as you follow the guidelines.

The True Costs of The Checkbook IRA

Other companies do not completely disclose all of the hidden costs. The Checkbook IRA his is not cheap by any means. It will cost you money each year and it will complicate your life. On the other hand, in the right circumstances it is a perfect investment vehicle.

In order to maintain The Checkbook IRA, you will need to:

Keep proper accounting records for the LLC.
File annual Federal and State tax returns for the LLC if you have any unrelated income. (Note some states do not require filing tax returns.)
Make other mandatory filings with the state (names of officers, etc.) where you formed your LLC.
Pay annual franchise taxes or other fees to the state where you formed their LLC.
Pay a fee to the Resident Agent in that state where you formed the LLC.
Pay custodial fees.

This table shows the additional estimated initial costs of setting up “The Checkbook IRA” in our favorite state. The costs for other states probably will be more. These costs are in addition to the package price listed above!

Description	Simple	Turn Key Solution
Change Custodians	$150	$150
Form the LLC ¹	N/A	Inc.
Obtain an EIN	N/A	Inc.
Customize the Operating Agreement	N/A	Inc.
Obtain a Registered Agent.	N/A	Inc.
Fund in the LLC	N/A	Inc.
Attorney Opinion Letter ²	N/A	Inc.
Transaction Fees ³	100	100
Total Investment	$250	$250
Notes: 1. These are estimate only. The exact amount will depend on the state. 2. While not required it is advisable if you have complex transactions. 3. This is an estimate. The fees vary by custodian and type of transaction.

In addition to the first year startup costs, there are annual maintenance fees that will vary by state and the complexity of your investments. This is not an exact quote, rather a sample estimate of the types of fees you may incur on an annual basis and assumes that your plan owns only one asset.

Description	^Simple	Turn Key Solution
State filing fees ¹	N/A	$100
Tax Return Preparation ²	N/A	Varies
Registered Agent Fee	N/A	50
Custodial Fees ³	80	150
Appraisal Fees ⁴	Unknown	Unknown
Total Minimum Continuing Costs	$80	$300
Notes: 1. These are estimate only. The exact amount will depend on the state. 2. You may or may not be required to file Federal and State income tax returns. It depends on the state you use for the LLC, types of investments you make and how they are structured. 3. This is an estimate. The fees vary by the custodian, the number and type of assets and by the fee schedule of the custodian. If you use the LLC option, the custodian will only be charging for one asset. 4. Some custodians require an annual appraisal. Read their plan documents carefully.

The Checkbook IRA is a powerful, complex and expensive solution! If you don’t need the flexibility it offers or don’t think you are up to following all of the ongoing requirements then we suggest the Simple solution. You may pay a little more in custodial and appraisal fees but if you won’t be complicating your life as much.