In order to better help individuals financially prepare for their retirement, the Government enacted a law (Employment Retirement Income Security Act or ERISA) in 1974. This law allowed the formation of individual retirement accounts (IRAs). There are many type of IRAs. One of the more versatile IRAs, in terms range of investment allowed, is the self-directed IRA. Many self-directed IRAs allow alternative investments like real estate, private mortgages, precious metal and even horses.
The increasing popularity of Crypto assets has opened new opportunities for IRA investment. There are some IRA custodians who now allow investment in Crypto Currency using IRA funds. You can buy individual crypto coins or invest in dedicated funds that hold them.
Does IRS consider investing in Crypto Asset like Bitcoin legal?
In March 2014, the IRS declared bitcoin as a commodity. So, yes, it is legal to invest in Crypto currency. That means Bitcoin is now treated like stocks and bonds in terms of taxation. Any loss or gains will be treated as either capital loss or capital gains.
Since IRS has now deemed Crypt currency as a “property”, it is required to have a custodian to invest in these properties. A custodian normally is a financial institution (in this case) who holds their customers’ assets for safekeeping. This provision ensures that the property is not exposed to loss due to theft or other means. These types of properties are held in a digital or physical format.
Here are a couple of IRAs that allow investing in Crypto currency.
- BitcoinIRA IENSCO Trust Company 3. Millennium Trust Company 4. The Entrust Group 5. New Direction IRA 6. CoinIRA 7. Broad Financial
At this point, New Direction IRA are currently working with two companies who are able to provide digital currency in an IRA, and have worked with New Direction to establish a process for purchasing and storing these assets. The companies are Noble Bitcoin and Coin IRA, and they are able to provide you with pricing and all the required paperwork, and can walk you through the process of investing in digital currency. New Direction doesn’t recommend or endorse either company in particular, but they do work together with NdIRA as they expand into the IRA digital currency market.
New Direction is the administrator of the IRAs
The contact information for Coin IRA is:
Morgan Steckler or Neal Rosenshein
The contact information for Noble Bitcoin is:
Kingdom Trust – can only with the firms listed below –