Purchase Cryptocurrency With a Retirement Account
A lot of people understand that retirement accounts are like IRAs and 401Ks or ROTH investment options. They give tax breaks that help people save money for retirement reasons. And, many cryptocurrency investors also think they can avoid paying taxes because their digital currencies are making money through accounts set up for retirement. But this is a process that is not as easy as one may think.

When an American citizen or resident wants to by cryptocurrencies through an IRA, they need to first transfer funds off shore. They also need to setup an LLC that operates in a country with zero taxes. The company that is offshore will need to then open and bank account offshore that works with a digital currency and wallet to complete the transactions on the behalf of the individual.

It sounds complicated and that is because it is, you need to have help from an attorney in the United States and a foreign counterpart in the country that you’ve chose for hosting your IRA. There a lot of legal fees as well that will start to build up fast. And without understanding the way that transactions work internationally, there’s a chance it will not work out. If the person hired to set up the IRA chooses to bail out and run, you can’t really do much about it.

The complex nature of the situation and potential for fraud are only the first of the many problems you’ll have to face. You’ll also have to learn how to take care of and handle your own investment. The IRS will not allow you to borrow money from the account or make a profit from it in any way. It’s just like any other personal investment company would work.

Also, the total contributions that happen on a yearly basis can never exceed $5,500 if you’re less then 50 years old. After that, they cap at $6,500 and that is only the beginning. Even if you make it through the challenges and red tape, there is still a strong chance that you’ll have to pay taxes on any capital gains made.