Should I buy cryptocurrency with my IRA?

Cryptocurrency IRAs can be funded with pre-tax dollars or existing retirement assets. Investors can structure the account as a traditional IRA so that they can fund it with pre-tax dollars, or they can structure it as a Roth to ensure tax-free growth. Since most investors purchase cryptocurrencies with after-tax dollars anyway, this latter option is particularly attractive for millennials. There are enterprises that offer DIY cryptocurrency IRA services and will set up business entities commonly know as a self — directed IRA. The custodian exits the process once the LLC is set up and it is up to the client to find a trustworthy exchange platform, execute the trade, and store the cryptocurrency safely. There are other services that handle full responsibility for setting up an account, rolling over funds, making the exchange, and securing the funds in a digital wallet. A full service company will ensure that every step of the process is IRS compliant. Most investors will probably use a full service company to ensure compliance with IRS legislations.

The information in this article is of a general nature and should not be acted upon without further details and/or professional assistance. To identify and implement the best strategies best suited to your situation, please contact us.

Busayo Ogunsanya, CPA, MST

Founder of Amus Inc./Managing Partner BigAppleTaxReturn

Busayo@bigappletaxreturn.com

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