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 Bitcoin, Ethereum, Ethereum Classic, or Litecoin, with a Self-Directed IRA is quick and easy.
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
- No commissions.
- No broker fees or requirement to go through an IRA custodian or broker to buy or sell cryptocurrencies.
- Buy, sell, exchange, and sell bitcoins or any cryptocurrency of your choice through an exchange anytime you want.
- Use any cryptocurrency exchange of your choice.
- As manager of the IRA LLC, open your own cryptocurrency exchange and buy, sell, transfer, or exchange any cryptocurrencies when you want
- Hold your own digital or hard wallet with your IRA cryptocurrencies – do not give up control of your private key
- Control Your Own Wallet & Private Key: With IRA Financial Group cryptocurrency self-directed IRA structure, you will have total control over your crypto wallet so you will have control over the cryptos and the private as well as public address associated with the wallet. You will not have to rely on an IRA custodian or broker to control your cryptos and you will be free to buy, sell, exchange, or transfer the cryptos anytime you wish either via an exchange or a wallet. Buy and sell cryptocurrencies on your own with total control and security with IRA Financial Group’s Self-Directed IRA Cryptocurrency Solution.
- Flat annual IRA custodian fees – no transaction fees or annual valuation fees.
- Work with experts – we have helped over a thousand retirement account investors in just the last year invest in cryptocurrencies.
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.