IRA Financial Group, provider of self-directed IRA LLC and Solo 401(k) Plans, has announced the introduction of its self-directed IRA bitcoin with checkbook control. The bitcoin self-directed IRA LLC structure will allow retirement account investors to purchase bitcoins and generate tax-deferred or tax-free gains.
Adam Bergman, a partner with the IRA Financial Group, commented: “We are excited to offer our clients with a tax efficient and cost effective way to use retirement funds to buy bitcoins,”
On March 25, 2014, the IRS issued Notice 2014-21, which set the initial IRS position on the taxation of bitcoins. According to this ruling, virtual currency is treated as property for U.S. federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency. By treating bitcoins as property and not currency, the IRS is providing a potential boost to investors but it also imposing extensive record-keeping rules—and significant taxes—on its use. With IRA Financial Group’s self-directed IRA LLC bitcoin solution, traditional IRA or Roth IRA funds can be used to buy bitcoins without tax.
The primary advantage of using a self-directed IRA LLC to make investments is that all income and gains associated with the IRA investment grow tax-deferred. IRA Financial Group’s option for bitcoin investors is an IRS approved structure that allows one to use their retirement funds to make bitcoin and other investments tax-free and without custodian consent. The Self-Directed IRA LLC involves the establishment of a limited liability company that is owned by the IRA and managed by the IRA holder or any third-party. As manager of the IRA LLC, the IRA owner will have control over the IRA assets to make traditional as well as non-traditional investments, such as real estate.
Using IRA Financial Group’s self-directed IRA LLC with ‘checkbook control’ solution to make bitcoin investments offers some different investment opportunities, including the ability to diversify a retirement portfolio with real estate, precious metals, or other alternative investment options.