Is Bitcoin IRA approved for retirement accounts?

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katara's picture
katara
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Joined: Mar 13 2017
Posts: 1
Is Bitcoin IRA approved for retirement accounts?

Companies are now offering the option of "Bitcoin IRAs."

https://regalwallet.com

Are people now starting to do this?

Has the IRS approved Bitcoin for self-directed IRAs similar to Gold IRAs?

reflector's picture
reflector
Status: Gold Member (Offline)
Joined: Aug 20 2011
Posts: 264
approval not required

the whole point of a self directed IRA, is that you direct it yourself.

you don't need the IRS' approval, you can buy land, or gold, or bitcoin, or collectible firearms, or any other investment/speculation.

the main thing to be aware of, is that you have to be careful to keep records, and not to derive any personal benefit from the property in the IRA account until such time as it's disbursed. e.g., if you have a case of collectible wine, you don't drink the wine.

as always, consult your tax professional if you have any doubts.

 

 

mrees999's picture
mrees999
Status: Gold Member (Offline)
Joined: Aug 16 2013
Posts: 295
Bitcoin IRA

Hi Katara

I recently opened a ROTH IRA for bitcoin.  I used bitcoinira.com

It looks legit to me and it is run by the former director of the US Mint.  If bitcoin rises in price to compete with gold, having the non-taxed exit at those prices in very interesting.  If just 1% of gold were converted to bitcoin, the price would be around $7,000 each. I can see that happening knowing what I know *I started investing in bitcoin when it was under $50 over four years ago.

It's one of those crazy investments you have to just close your eyes because the drops and rises are exaggerated for a new asset class. We call ourselves "HODLers"  if we don't sell at any price. This stands for "Hold On For Dear Life."

Having it in an IRA makes that a lot easier as you can't rush to sell it in a panic drop. It has historically always risen again to new highs and in my opinion, for hundreds of reasons - it's just the start.

 

Not giving investment advice, just my view and sharing what I did, - hopefully, it helps.

 

-Mark

 

 

chrishaiden66's picture
chrishaiden66
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Joined: Apr 5 2017
Posts: 10
What is the BTC expense ratio

What is the BTC expense ratio for the IRA account?

mrees999's picture
mrees999
Status: Gold Member (Offline)
Joined: Aug 16 2013
Posts: 295
BTC IRA expense

For the Roth IRA the charge 15% upfront fee,

It is then $100 per year storage custody fee. Minimum 10k.  Held by Kingdom Trust with a 3-part multi-signature wallet segregated wallet with giving you read-only key access to verify and audit yourself in real-time. The keys are all held in cold storage and separated geographically. 

 

Does this help?

 

Chris Kline's picture
Chris Kline
Status: Member (Offline)
Joined: Aug 22 2017
Posts: 1
Bitcoin IRA

Hi Katara, I'm going to build off of what Mark said. Yes, Bitcoin is approved for retirement accounts.

You can invest in Bitcoin with an IRA by rolling over funds from an existing IRA, Roth IRA, or 401k into a self-directed Bitcoin IRA account or you can start a new Bitcoin IRA account with funds from your savings. At this time, you cannot roll your current Bitcoins into an IRA – the IRS requires that buying into a Bitcoin based IRA be done with US dollars.

There are two ways that you can invest in a Bitcoin IRA:

You can “Do-It-Yourself” – This method requires setting up and managing your own LLC and carries a significant amount of risk. Once it’s set up, you then transfer the money into an IRA and into the LLC’s bank account exchange. At which point, you can begin making investments on behalf of your LLC. A self-serve model circumvents using a custodian and comes with significant risks. You must have a deep understanding of the in’s and out’s of the rules and regulations surrounding self-directed IRAs, because it’s easy to make prohibited transactions, which can get you in legal trouble and jeopardize your funds. There are a number of companies which specialize in simply setting up your LLC for you to invest in Bitcoin, but transferring your funds, making the exchange, and managing the investment is up to you. All of the risk is on your shoulders as well.

Use a Full-Service Company – My company, Bitcoin IRA, is a turn-key solution that ensures full compliance and security for all steps in the process. We will set up your account, rollover your funds, execute the Bitcoin exchange trade for you and move your Bitcoins securely into a digital wallet. You will actually own Bitcoins (not shares in a fund that represent Bitcoin) and they are stored exclusively with BitGo’s digital wallet, the leader in the industry with a multi-layered security system. We also provide three separate security keys kept in three different “cold storage” locations and, for additional security, we require ID and voice verification to make any transfers or purchases. We are a full-service company which is insured, bonded and licensed, so you incur none of the risk in setting up a cryptocurrency IRA. A full service company, like Bitcoin IRA, will make sure that the entire process is IRS compliant for you.

I hope that answers your question. Both options can work, but if you need more information on our full-service solution, I encourage you to speak with one of our representatives at BitcoinIRA.com and they can walk you through it.

 

- Chris Kline

skj's picture
skj
Status: Member (Offline)
Joined: Aug 22 2017
Posts: 1
Bitcoin IRA

For those that were looking, the site is www.bitcoinira.com

Bitcoin IRA is the full-service option Chris was talking about.

 

 

robbie's picture
robbie
Status: Bronze Member (Offline)
Joined: Jul 16 2008
Posts: 96
I'm not quite sure what you

I'm not quite sure what you mean when you say an IRA LLC "carries a significant amount of risk". The prohibitions are clearly stated and easy to understand for anyone with even a marginal  understanding of cryptocurrencies, and take less than 5 minutes to learn. 

Executive summary: Buy, sell or hold. Don't get creative. Keep your personal finances separate. Don't hold assets at home or in a safety deposit box.

For those that follow the rules, I don't see how the risk can be called "significant". For the few that choose not to follow these simple rules, it may certainly be easier to make prohibited transactions. 

If interested in comparing costs and set-up time, I have found irafinancialgroup.com to be very efficient in setting up a checkbook IRA LLC at a competitive price. They also have specialists and lawyers available for any questions that come up while opening the account, or down the road when the inevitable questions arise, for a low annual fee (unlimited access). They are currently waiving some of their account setup and custodial fees until 2019. There are reputable lower cost custodians (iraservicestrust.com) but they won't answer the legal and practical questions that many will have. 

I would be interested in hearing how others with IRA LLC's are planning to manage their cold storage (device, location/trustee) to ensure compliance with the following, which also likely applies to holding crypto:

http://www.irafinancialgroup.com/preciousmetals.ph

rob 

 

robbie's picture
robbie
Status: Bronze Member (Offline)
Joined: Jul 16 2008
Posts: 96
Apologies for the broken

Apologies for the broken link.

http://www.irafinancialgroup.com/preciousmetals.php

 

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