The Best Way to Hold Cryptocurrencies with a Self-Directed IRA

IRA Financial Group has helped over a thousand clients invest in cryptocurrencies in just the last year. We have authored numerous articles on Forbes on the taxation of cryptocurrencies.  

How to Use a Wallet Control IRA Self-Directed IRA LLC to Invest in Cryptocurrency?

Working with IRA Financial Group to purchase cryptocurrencies, such as Bitcoins, Ethereum, Ethereum Classic, or Litecoins, with a Self-Directed IRA is quick and easy.

Self-Directed IRA LLC Cryptocurrency Solution 1. Establish a Self-Directed IRA account with IRA Financial Group.

2. Rollover retirement funds, cash or in-kind, tax-free to new Self-Directed IRA account.

3. The IRA assets will then be transferred to the LLC tax-free in exchange for 100% interest in the newly established IRA LLC.

4. You, as manager of the LLC, will open a bank account for the LLC at any local bank. IRA Financial Group will draft an LLC Operating Agreement identifying you as manager of the LLC and the IRA as the sole member.

5. You, as manager of the LLC, will then have checkbook control over all the assets/funds in the IRA LLC to make the cryptocurrency investment.

6. A cryptocurrency account would be opened in the name of the IRA LLC. We have helped hundreds of clients establish cryptocurrency accounts for their self-directed IRA LLC at most of the popular cryptocurrency exchanges.

7. You, as manager of the LLC, will then wire the IRA LLC funds to the new cryptocurrency account opened at the exchange. The account will be opened in the name of the IRA LLC. As manager of the LLC you will have the option of keeping the cryptos on an exchange, such as Coinbase, or move them to a digital or hard wallet you control and where you hold the private key.

8. Since the LLC is owned 100% by an IRA, it will be treated as a disregarded entity for tax purposes. No Federal income tax return is required to be filed and all income and gains from the cryptocurrency investment will flow back to the IRA without tax.

Why is the Cryptocurrency Wallet So Important?

In a virtual currency system, a user creates a “wallet.” A wallet is a digital computer file that contains information used in sending and receiving units of a virtual currency. When the wallet is created, a random wallet address is generated; this is a unique alphanumeric identifier, which is conceptually similar to an e-mail address. The wallet would have a public key and private key.  The public key is essentially the public address of the wallet, whereas, the private key is only known to the wallet holder.  Without the private key, you will not have access to the wallet and, thus would not be able to access the cryptos held on the wallet.  On the flip side, anyone who has your private key essentially owns the content of the wallet.  This is why it is so important to always keep your private key confidential, safe and secure.  Do not reveal it to anyone you do not wish to have access to your wallet. Think about it like this: assume you had a glass bowl with a lock.  Inside the glass bowl is a gold coin.  Anyone can see the glass bowl, which is your public key.  The gold coin contained in the glass bowl is the Bitcoin address. However, only the keyholder can actually open the glass bowl and get the coin.  The key to the glass bowl is the private key.  It’s like your ATM card pin number.  Bitcoin users can have multiple wallets.

Wallets can be in the form of digital, online, hardware, or paper.  A digital wallet allows you to access your cryptos on a phone or android application.  An online wallet is literally a web-based wallet and it is the easiest to use. Online wallets store your private keys on a computer connected to the Internet and controlled by someone else. Whereas, a hardware wallet is a special type of bitcoin wallet, which stores the user's private keys in a secure hardware device. A hardware wallet is considered one of the safest way to hold cryptocurrencies. While a paper wallet is a document containing all of the data necessary to generate any number of Bitcoin private keys, forming a wallet of keys.

Why Choose IRA Financial Group For Your Cryptocurrency Self-Directed IRA Investments

Cryptocurrency investments, are risky and highly volatile.  Any investor interested in learning more about investing in cryptocurrencies should do their diligence and proceed with caution.

Free Crypto IRA Solution Information Kit

For more information on our Crypto IRA Solution, please click the image below to receive our free information kit.

Crypto IRA Solution Kit

Crypto IRA Solution Kit

Why Work With the IRA Financial Group?

The IRA Financial Group will take care of the entire setup of your Self-Directed IRA LLC Cryptocurrency “Checkbook Control” structure. The whole process can be handled by phone, email, fax, or mail, and typically takes between 7-14 days to complete, the timing of which largely depends on the state of formation and the custodian currently holding your retirement funds. Our IRA experts and tax professionals are on-site, greatly reducing the setup time and cost. Most importantly, each client of the IRA Financial Group is assigned a tax professional and CPA to help with the establishment of the Private Key Control Self-Directed IRA LLC structure.

Please click here to read more information on how Bitcoins and other virtual currency works.

Call us at 800-472-0646 and learn more about the benefits and tax advantages of establishing a Self-Directed IRA LLC to purchase cryptocurrencies tax-free. Take control of your retirement funds and hold cryptocurrencies yourself on an exchange or wallet! It’s quick & easy and we can have cryptocurrencies in your Self-Directed IRA LLC structure established in days!

To learn more about using a “Checkbook Control” Self-Directed IRA LLC to make Bitcoin and other investments without tax, please contact one of our Self-Directed IRA Experts at 800-472-0646 for more information.

Please click here to read the Forbes article by IRA Financial Group’s Adam Bergman entitled “What To Know Before Purchasing Cryptocurrencies With Retirement Funds.”

Read the latest Forbes article by IRA Financial Group's Adam Bergman.

Did you know? You can use your Self-Directed IRA to buy Bitcoins and other cryptocurrency and generate tax-deferred gains.

You may also find the following links helpful

Is a Self Directed IRA LLC IRS Approved?

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