Self-Directed Investments

No, you can select any depository, but there are depositories that Digital Trust currently holds metals with.

Segregated storage is when you choose to store your Precious Metals in a separate vault at the depository storing your metals. There are typically higher fees associated with this storage option. Non-segregated (commingled) storage is when you choose to store your metals in a vault that also holds metals for other customers. Commingled vaults have sub-accounting in place for each customer to ensure appropriate accounting.

No. You can only contribute cash to your qualified account with annual contributions or through rollovers or transfers from other qualified accounts.

Because the LLC is the owner of the investment, all income and expenses can go through the business checking account.

No. That would be considered a prohibited transaction.

Yes. Please contact customer service at Digital Trust for information on the procedure to purchase real estate through a corporate entity such as an LP or LLC.

If your qualified account invests in an LLC or LP that you or a disqualified person owns or controls, the investment could be a prohibited transaction.

Yes. Investments in newly formed private entities are not prohibited under the Internal Revenue Code, with the exception of subchapter S corporations.

According to the IRS, a Mortgage note must be made for value and cannot be a gift or for free.

No, different percentages can be permitted so long as the note is for more than the amount being borrowed.

No. This is potentially considered a prohibited transaction, per Internal Revenue Code 4975. You may not purchase a property or an interest in a property that is currently owned by any disqualified party. Per IRS Publication 590: disqualified parties include your fiduciary and members of your family (spouse, ancestor, lineal descendant, and any spouse of a lineal descendant), and more.

You can purchase real estate directly through your IRA account, have real estate transferred from an existing IRA or roll it over from a qualified plan. It may also be acquired by your IRA account as a result of a foreclosure on a mortgage or deed of trust which is currently held within your IRA account.

Yes. Digital Trust will hold direct title to real property, in addition to interests in Limited Liability Companies (LLC) or Limited Partnerships (LP) that hold title to real property; notes secured by trust deeds/mortgages; and interests in Real Estate Investment Trusts (REITs).

This is where 50% or more of the entity will be owned by the Digital Trust IRA and other disqualified persons or family members.

Non-recourse loans are the only types of loans that are permitted to be utilized within a qualified account. Traditional mortgages use personal assets and accreditation as security for the loan.  Since personal assets cannot stand as security for the loan within a qualified account, the only recourse the bank has is to go after the property itself. Therefore, they typically will require a higher percentage of the cost of the property to be used as the down payment. Please consult your tax adviser about any Unrelated Debt Financed Income Tax (UDFI) that could arise due to obtaining a non-recourse loan.

More information can be found on IRS.gov, particularly their page on Unrelated Business Income Tax. Additionally, many tax advisors and CPAs will be able to assist in the determination and calculation of UBIT and UDFI owed on your retirement account’s investments.

Limited partnerships, limited liability companies and other entities that carry on an unrelated business or borrow funds to finance the acquisition of property may generate Unrelated Business Taxable Income (“UBTI”). UBTI is generally reported on Schedule K-1 issued by the entity. If the UBTI attributable to your account exceeds $1,000.00 for any taxable year, IRS Form 990-T must be filed along with the appropriate amount of tax, payable from your IRA Account. We do not monitor UBTI and does not prepare IRS Firm 990-T. If the tax is applicable, you must prepare or have prepared IRS Form 990-T and forward it to us along with written authorization to pay the tax from your account. If you are required to file IRS Form 990-T, you must apply for and utilize an Employer Identification Number (“EIN”). You may not use our EIN or your own Social Security Number. For more information on UBTI, please refer to IRS Publication 598 and/or consult your tax advisor.

No. This is not a service that Digital IRA provides. You will need to contact your attorney or tax advisor with respect to the entity’s formation.

The supporting documents needed to purchase an investment vary based on the investment being purchased. Types of documents required for each investment type are listed on our Direction of Investment Form listed on our Self-Directed Account Forms page.

As the custodian, we own the assets in each account for the benefit of (FBO) your individual account. This means that we execute all investment documents and all documents related to the sale of the asset. This titling also ensures that the IRS recognizes that you are not personally benefiting from the assets held in your account before retirement. This allows you to recognize any potential tax benefits for which you might be eligible.

Investments made from accounts with us must be titled:   DIGITAL TRUST FBO YOUR NAME & ACCOUNT TYPE Example:  Digital Trust FBO John Smith Roth IRA

Your IRA account is buying the property and not you as an individual. Therefore, it must be titled as follows: “Digital Trust FBO: Account holder name and Account Type”. All documents related to the purchase of the property such as the contract/purchase agreement, title commitment/insurance, liability insurance, etc. must be titled accordingly.

No. If you should need tax or legal advice regarding your investment, you may engage a specialized tax law firm to provide the needed advice.

If your IRA or Qualified Retirement Plan loans funds to certain family members, such as lineal descendants and spouses of lineal descendants, or an entity that you or certain family members own or control, whether controlled individually or as an officer of a corporate general partner, managing member, etc., the transaction could possibly be a prohibited transaction under the Internal Revenue Code Section 4975. Our policy on this issue is that if you or another disqualified person is an officer or director of an entity, or an officer of a corporate general partner, managing member, etc., and you will collectively own less than 50% of the entity, then you will need to obtain a legal opinion from an ERISA or tax attorney addressed to you in which the transaction is discussed in detail prior to us processing your investment instructions. If you, any family member, or disqualified persons collectively will own 50% or more of the entity, we will not process the investment even if you are able to obtain a legal opinion.

IRS regulations prohibit IRA investments in life insurance and collectibles such as artwork, rugs, antiques, metals (there are exceptions for certain kinds of bullion), gems, stamps, coins (there are exceptions to certain coins minted by the U.S. Treasury), alcoholic beverages, certain other tangible personal property, and S-Corporations.

Alternative assets can be held in a variety of qualified accounts including Traditional IRAs, Roth IRAs, SIMPLE IRAs, SEP IRAs, HSAs, ESAs, and 401(k)s including Solo 401(k)s.

There are several types of investments that we will process. They include but are not limited to: Deeds of Trust/Mortgages, Real Estate, Partnerships, Limited Partnerships (LP), Limited Liability Company (LLC), Joint Ventures (JV), Checkbook, LLC, Private Placements and certain Precious Metals.