Checkbook-Control Private Equity

Growing business, including startups and established entities raise capital for expansion and provide a great investment opportunity for your self-directed retirement account. Capital raised in exchange for an ownership share in a business is referred to as private equity. If significant growth is expected you may get to have all that growth completely tax-free using Roth retirement funds in a Solo 401k plan or Checkbook IRA.

With a CheckBook Control Retirement Account you can identify opportunities not available through Wall Street and invest in those. Small companies with growth potential present incredible opportunities. Getting in at an early stage can make your investment grow manifold.

Companies may go through several rounds of funding as they seek angel, seed, and venture capital. Investing small amounts when funds are being raised from family and friends at the seed and angel stages can generate outsized returns.

Checkbook Private Equity Compliance

  • The investor is the Checkbook Retirement Account. All paperwork and documentation should be in the name of the investing entity, which may be your IRA-LLC, Solo 401k, or Defined Benefit Plan.
  • Be aware of prohibited transactions. Investing in an entity owned by a disqualified person as defined Section 4975 may have adverse tax implications.
  • Be aware of UBIT, UBTI, and UDFI. Investing in an operating business may result in taxable income to a retirement plan. If the private equity investment is in a company taxed a C-corp none of those taxes apply. Advanced tax strategies can be implemented, as well.