In this week’s episode, IRA Financial’s Adam Bergman Esq. answers questions about moving Bitcoin from one IRA to another, contributing to a SEP IRA and Solo 401(k) at the same time and using an IRA to bet on sports.
Question 1 from Chris T in Knoxville, TN: If I have Bitcoin with another IRA custodian – can I move it to your platform with Gemini to lower my annual fees?
The answer is yes! First, you would open a Self-Directed IRA with IRA Financial. You can do this right on our app. We will then provide you with a link so you can get on-boarded on Gemini. That account is then linked to your IRA. You can then transfer the cryptos you own with your current custodian, over to your new Gemini account. That’s it!
Since the IRA owns your new Gemini account, it will be a direct rollover. IRA Financial will handle all the paperwork. For $300, without any hidden fees, you will be all set to invest in cryptos using our Self-Directed IRA. Best of all, since you crypto are being traded with IRA funds, there is no annual taxes to worry about.
Question 2 from Twitter: Can I make contributions to a SEP IRA & a Solo 401(k) plan at the same time?
It’s a quirky situation from the IRS, as it will depend on the form you use to create your SEP IRA. IRA Financial, along with most custodians, will use IRS Form 5305 to set up your SEP. If you use this form, you cannot set up a Solo 401(k) also. However, if you do not use this form, and simply create a different one with similar language, you can set up a Solo 401(k) for your business.
If you qualify for a Solo 401(k), it’s by far the better option for the self-employed. There’s generally no reason to use a SEP IRA, since the Solo 401(k) has many more advantages, including the loan feature and Roth option. It may be an option for those just starting a business since the eligibility rules are a little laxer.
Question 3 from Facebook: Can I use my Self-Directed IRA to bet on sports through an online betting site?
Actually, you can use a Self-Directed IRA to bet on sports. Of course, it must be through legal means. You cannot use a bookie, for example. It does not violate the IRS prohibited transaction rules. It’s akin to investing IRA funds in cannabis, which is not allowed. That’s because cannabis is not legal on the federal level. Although not all states offer sports betting, it is legal federally.
It’s best to use an LLC when you open a sports betting account. The LLC will do the wagering. Any winnings will go back to the LLC, and the IRA as a result. Of course, we’re not telling you to go bet on sports with your retirement funds! Betting is all or nothing; you either win or lose. If a stock loses value, you’re not out of the “game.” It may go back up and you’ve lost nothing. But, we’re also not telling you not to bet on sports. It’s not against the IRS rules, so it’s up to you to decide how you want to “invest” your retirement funds!
AdMail – Keep it Coming
We hope you enjoyed the latest episode of AdMail. Mr. Bergman will continue to respond to questions each week so long there is a demand for them! If you have any questions for him, email him at [email protected].
As with his other podcasts, you can check out AdMail on SoundCloud. Be sure to subscribe to know when the next one pops up! Thanks for listening and have a great day, Self-Directed Nation!