Topic: Self-Directed IRA investing in Bitcoin - page 2. (Read 6277 times)

Besides researching through other trust companies, how does one go about creating a trust company?

The one trust company I've been researching self-directed IRAs through wants to wait until the IRS clarifies their position on Bitcoin as a collectable or not.

How does one pose a question to the IRS?

I am researching self-directed IRAs.  One trust company indicates the Bitcoins *must* be owned by them held for my benefit -- just like you can't have physical gold in a closet in your house in a self-directed IRA.  Their legal and IT departments are researching the viability and fees.  I have offered to host a virtual room to show them how to create a wallet and back it up, etc.  If/when it works out then I will report here.

I did discover this company which looks like one of the bigger players regarding self-directed IRAs...
www.pensco.com
But it is expensive to have them "manage" your self-directed IRA. Managing it on their end is simply generating annual paperwork that meets IRA regulations. I didn't think this was worth the cost.

So, I ended up withdrawing some IRA funds early and avoiding the penalty because I also paid college bills this year. See IRS publication 590 for details on that method. (still had to pay income tax on the IRA withdrawal)

So, I've now got a retirement wallet funded with bitcoins.

I had this exact thought over the weekend. With the stock market at an all-time high (being driven up before the big guys cash out and it crashes???), I'm not sure I want to put 2012 IRA funds into it (we still have until April 15th). Is there no current option for this? I'm not talking about putting in a huge amount.

I have had a couple of people I know want to put their IRA money into bitcoin and ask me for help.  Unfortunately I am unable to help them. If anyone knows a good way to deal with this, please offer some guidance.

Someone can have the ability to be the best baseball player in the world, but be without a bat and a mitt, can't he?

Having ability != Having resources.

Not to be a dick, but how exactly do you have the ability based on what you just said?

I have the ability to make this happen, what I don't have is the coins to back the ETF or the funds to go through all the proper red-tape that is necessary to get it to where the general populace can easily access it. Believe you me, if I had the resources it would be done in a heartbeat.

I think whoever has the foresight and resources to create a bitcoin-backed ETF will open the floodgates for traditional investors, will see bitcoin rise in value 10x to 100x, and will become very wealthy in a short amount of time.

Now, who do we know who both believes in bitcoin and has the money/contacts to get such a thing up and running?

One of the very early adopters with 10k+ bitcoins sitting in cold storage would be a good candidate...

Jork: Just wondering if you've looked into this at all and found a reputable custodian willing and able to handle an investment in BTC, as I'm about to be moving jobs and likely rolling my current-employer 401(k) into an IRA -- and the idea of diverting a portion of that into an aggressive investment in BTCs via a self-directed IRA has a lot of appeal to me...

Never heard of anyone putting their IRA in BTC. Keep us posted.

Bitcoin is still in early stage of development and adoption. Despite major steps forward IMO it is still to early to put in it money that you cannot afford to lose. On the other hand this could make you insanely rich.

Too much risk, to much to lose in my opinion.
But do as you like, it may be epic win after all

I'm interested in investing a portion of my IRA in bitcoin. The only way to do that would be to put the bitcoin investment into a Self-Directed IRA.
http://en.wikipedia.org/wiki/Self_directed_ira

It seems that an investment in bitcoin should be seen as an appropriate alternative, or non-traditional IRA investment. You could make a good argument that it should be a permitted investment, but I'm concerned that it would really take some convincing to get the IRA trustee to consider hosting the account.

Since investing in bitcoin doesn't fall in the category of "self-dealing", the trustee would probably question whether bitcoin is a "prohibited asset".

Regulations aren't clear on a virtual commodity that has real-world value but I couldn't find anything specific that would prohibit investing in something like bitcoin.

IRS regulations prohibit; Collectibles such as gems, stamps, baseball cards, coins--except coins minted by the US Treasury, life insurance, sub-chapter S corporation stock, you can't invest in family members....

IRS regulation permit; foreign currency, some collectibles such as artwork, antiques, some metals, real estate, foreign stock, cattle, commodities, royalty rights.

I think bitcoin is similar to a foreign currency for this purpose.

I would only consider using an offline wallet such as Armory for an investment like this which the trustee could use to verify the balance.

Anyone have any experience with this--or thoughts--ideas?