Cryptocurrency in an IRA: Pricing Comparison
Why Hold Cryptocurrency in a Self-Directed IRA?
Potential Tax Advantages
While investors have a variety of reasons for holding cryptocurrency, such as Bitcoin, in a self-directed IRA, one of the top possible reasons would be the tax advantages.
Investments within a self-directed account grow tax-deferred or tax-free, depending on the account type and as long as IRS guidelines are followed.
How Does Cryptocurrency in an IRA Work?
All IRAs must be held by a custodial entity, such as a bank or a trust company, approved by the IRS. Through a predecessor company, Equity Trust has been an IRS approved custodian since 1983.
As a leading provider of self-directed IRAs, Equity Trust has $25 billion in assets under custody and administration (as of 12/31/17).
Pertaining to cryptocurrency, once a retirement account is open and funded, you can establish a digital currency (cryptocurrency) trading account within our Digital Asset Platform.
As you direct, the funds in your IRA are transferred to the Digital Asset Platform. When cryptocurrency is sold, funds are transferred from the platform back to the IRA.
How Much Does Cryptocurrency in an IRA Cost?
There are a few custodians that allow cryptocurrency in an IRA. Each has a different pricing model and recently CoinNotes.com completed a comparison of the leading providers and below is the breakdown.
Pricing Comparison Example
How much do you have to pay to invest $50,000 in Bitcoin through your IRA?
Cash funds can be transferred via check or wire. All other assets are transferred either ACATS or non-ACATS.
With a self-directed IRA, your investments are up to you, within the bounds of the IRS rules and guidelines. The IRS does note provide guidance on what investment types are permitted, but dictates only what is NOT permitted. Examples of prohibited IRA investments include collectible (such as artwork, stamps, rugs, antiques and gems), certain coins and life insurance. See IRA Publication 590 for more information about prohibited investments.
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