You can choose between a self-directed Roth IRA, a traditional IRA, or, if you have a small business, an SEP IRA or a SIMPLE IRA might be the best. A self-directed IRA is like a typical IRA in almost every way, with the main difference being what you can invest. If you accumulate excess cash in the LLC IRA and want to transfer it to your brokerage IRA, you must first return the LLC's cash to your self-managed IRA account and then have the brokerage institution request a transfer from trustee to trustee. All investment expenses are paid from the self-directed IRA and all income is returned to the self-directed IRA.
A self-directed IRA can invest in assets that go far beyond the traditional stocks, bonds, funds and more that are available at one of the leading online brokerage agencies, and that's the main advantage for investors looking to use a self-directed IRA. In some cases, it may make sense to use both approaches, with a small brokerage account within the LLC IRA to maintain capital productivity and a separate IRA to isolate a larger stock portfolio from liability risk. Whether you have a conventional IRA or a self-directed account, you can structure it like a traditional or Roth IRA. With the self-managed IRA or the regular IRA found in most financial institutions, simply check a box to indicate the combination of stocks and mutual funds you want.
Transferring funds from an existing IRA to a self-directed IRA is a simple process and is not a taxable fact. While it can be difficult to create a self-directed IRA for brokerage purposes, that doesn't mean that an IRA in and of itself is always a complicated instrument, especially if you work with an IRA management company that is on your side.