The Good, The Bad, and The Ugly of Digital Currency - Part 8
Updated: Sep 12, 2022
Control: Digital Currencies & What You Should Consider Before Investing
This series of articles are intended to shine a light on all the bullshit out there about digital currency investment in your self-directed IRA. Decentralized IRA – Invest in digital currency and never pay taxes! If this is your goal, then you need to keep reading.
What digital currencies can I invest in?
If you invest with an IRA LLC, you can invest in whatever currencies are available to purchase on the digital platform you choose to invest through. If you invest through a digital currency dealer with transactions directed by you through Preferred Trust Company, the list below are the digital currencies that Preferred Trust Company will custody on behalf of your SDIRA:
■ Bitcoin ■ Bitcoin Cash ■ Litecoin ■ Ethereum ■ Ethereum Classic ■ Stellar ■ ZCash
Ask if you have a specific digital currency you are interested in investing as the trading platform we buy and sell from does allow additional digital currency types. We just do not include them in the main course meal if you know what we mean.
What should I consider before investing in digital currency with my SDIRA?
■ You need to be willing to look at the investment in digital currency as long-term hold strategy. That is not to say you cannot buy and sell at opportune times. If you are a man-handler, manhandle. Chances are you live and breathe digital currency. If not, do not play Russian roulette.
■ You cannot use the digital currency to purchase goods or services. Again, these are your retirement funds intended not be touched until you retire.
■ Your investment risk tolerance. Do not put all your eggs in one basket. Performing due diligence on the digital currency and expand your knowledge before you jump in. For more education, you can review IRS Notice 2014-21 which describes how existing general tax principles apply to transactions using virtual currency. The notice provides guidance in the form of answers to frequently asked questions by consumers.