How and why to hold bitcoins in your Roth IRA (yes, you can do it today!)

[BitDreams]

Update:

It took about about 3 weeks to set up and fund the IRA LLC.  This was an intense period of research, phone calls, printing, filling out, scanning, and emailing forms, overnight mail, trips to notaries, trips to banks, record-keeping, and steering around all the roadblocks that popped up along the way.  The power elite do not want this to be easy!

It took about 6 weeks to purchase the bitcoins.  I decided to use only U.S.-based exchanges, so that if anything went wrong, I could sue them in a U.S.-based court.  CampBX flaked out on me, so I wound up doing all my purchases through Coinbase.  Their buying limits were a major obstacle.  Shortly after I bought my last bitcoin, they announced that my purchasing limits had been raised.  Wasn't that super of them!

So about 9 weeks after launching the project, during which time I spent about half of my waking hours on the effort, I finally had a nice nest egg of bitcoins in an IRA LLC owned by my Roth IRA. 

I'll be 59 1/2 in a year or so, after which all withdrawals will be tax- and penalty-free!

Now I'm just waiting for the price to go up!

Was hoping you can perhaps provide an update to this thread for those who might be considering mirroring your efforts.

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[aminorex]

I've held my crypto in a Roth vehicle since 2013.  The value has increased  12x.  I saved more than 4x my original investment in tax liabilities already.  Keep in mind that if you need money, you can always borrow from the IRA.  You have to pay it back with interest, but you are just paying interest to yourself, so it's a wash, long-term.

[jzcjca00]

Was hoping you can perhaps provide an update to this thread for those who might be considering mirroring your efforts.

All this effort is no longer necessary.  Just buy GBTC in your brokerage IRA, or maybe COIN next month, if we are lucky.

[mmortal03]

Was hoping you can perhaps provide an update to this thread for those who might be considering mirroring your efforts.

All this effort is no longer necessary.  Just buy GBTC in your brokerage IRA, or maybe COIN next month, if we are lucky.

GBTC hasn't been following the BTC price very closely lately. For example, I bought some GBTC six weeks ago when BTC was priced around $900, and the value of my GBTC holdings are *down* 2.25% (and were down more than that a few weeks ago). Given that GBTC shares can be redeemed for actual BTC, I doubt the GBTC price premium will ever go into the negative significantly, but you can get caught in a situation where a significant premium can be absorbed in a sell-off before seeing any gains, depending on when you buy in.

[URSAY]

A very large bank has this asset on their restricted trading list.  Where are peeps trading this asset?

[Hydrogen]

Holding btc in a roth LLC sounds like a good idea.

My main concern would be roth IRA's being taxed in the future as the deficit grows.

If I remember right, taxes and fines on 401k's have been steadily rising.

It could be safe to assume IRA's will be next on the tax hike list.

[spag]

Am also interested in this.  
Regardless of the (failed) COIN ETF and (overpriced) GBTC fund,

An IRA LLC seems to be of great value

Cryptocoins defy the expected tradeoff that a Roth carries -- i.e., the lost earnings compared to the extra dollars of pre-tax investments that are normally able to compound.   Bitcoin could easily dwarf stock numbers and the tax benefit is far greater than the appreciation expected from a hypothetical 20% extra pre-tax coin.  That's precisely because Roth allows tax-free trading.  That darn IRS advisory makes tracking sales so confusing, and a way to to avoid triggering capital gains on every sale is a godsend. There's plenty of volatility and opportunity to hedge alt-coins, not to mention benefits from holding other assets without capital gains (like gold).  

That said, it sounds like it's $1500 for something that probably should cost $300.  

https://www.broadfinancial.com/self-directed-ira/ira-llc/ says the following:

"No longer confined by a bias towards stocks, bonds, and mutual funds, it can invest in almost any asset.

Theoretically this process could be performed without a facilitator. An individual investor could establish a new self directed IRA by a qualified custodian, and then open a LLC for the account. However, this path could potentially be dangerous for your retirement account.

It’s very easy to fill out the requisite documents in ways which will not legally conform to self directed IRA regulations. This could result in a rejection of your application, or even an implosion of your IRA with all of the accompanying penalties. With Broad Financial’s platform, the documents are guaranteed to be accurate and hassle-free."

Isn't there demand enough to figure out how to do this without the $1500?  Anybody good with legalzoom.com or nolo.com?

[BurtW]

I tried to use BitcoinIRA.com.  I went through all the paperwork, moved all the money from my T.Rowe ROTH IRA to them and got ready to buy Bitcoins.  All of the sudden they said they would not do business with me because I had traded on LocalBitcoins.com and they have a policy of not doing business with anyone they can show has done business with LocalBitcoins.com.

So I got all my money back.

I then went to Broad Financial and they are great.  I am so glad that BitcoinIRA.com turned me down!!!  Broad Financial is a much better deal:

1) The flat fee at Broad Financial is less than the percent fee I would have paid BitcoinIRA
2) At Bitcoin IRA they hold the private keys to the Bitcoins, with Broad Financial I hold the private keys to my Bitcoins and they have nothing to
do with them!
3) At BitcoinIRA you can only buy Bitcoins and a few other cryptos.  With Broad Financial I can hold ANY crypto, gold, silver, stocks, bonds, pretty much anything allowed by the IRS.
4) With BitcoinIRA you must use their one broker to buy the cryptos.  This is the broker that will not do business with anyone who has ever traded on localbitcoins.com.  With Broad Financial you buy the cryptos (or gold or whatever) using checks in the checking account of your IRA which you have access and control over.

There is no question, Broad Financial is the better plan.

[megynacuna]

Holding btc in a roth LLC sounds like a good idea.

My main concern would be roth IRA's being taxed in the future as the deficit grows.

If I remember right, taxes and fines on 401k's have been steadily rising.

It could be safe to assume IRA's will be next on the tax hike list.

Holding BTC whether in an online wallet or hardware wallet is a  good idea and will grow to reward you if you are patient enough and let it in bitcoin  for a year or even more but keeping it in a roth LLC will definitely attract some tax component and you should be ready to pay.

[BurtW]

Holding BTC whether in an online wallet or hardware wallet is a  good idea and will grow to reward you if you are patient enough and let it in bitcoin  for a year or even more but keeping it in a roth LLC will definitely attract some tax component and you should be ready to pay.

The reason to put your BTC into a Roth IRA is that then there will be no taxes on the gains.  So you "should be ready to pay" what exactly?  Why did you go off about online and hardware wallets?  Are you just a posting bot?  If so then I hope you die a horrible death (for a posting bot).  If a real person then WTF are you talking about?