Cryptocurrency IRAs have become a major interest in our industry. The problems with these programs are numerous, mainly that you, the client, are not in control. These are centralized schemes that do not empower the individual. What’s worse is the fees are an astronomical 15-20% or more of your entire investment portfolio! You are limited in your investments, and most importantly you do not have access, control, or custody of the assets. With Perpetual Assets IRA LLC, you have it all, for a flat, affordable fee.
If You Don’t Hold It, You Don’t Own It
What happens with a crisis in confidence or the next banking crisis? Planning for these events are many investors’ main reasons for investing in cryptocurrency as we enter a new financial paradigm and move away from government-issued fiat currencies. Even if your centralized IRA crypto is insured, you still have a third party between you and your assets. If you don’t hold it, you don’t own it.
Counterparty risk will be a key buzzword in the coming financial turmoil. Think Bernie Madoff, only widespread, with numerous claims on the same asset, not to mention the insurance covers a U.S. dollar valuation at the time of loss. Even if your loss is made whole by a third party insurer, how long will it take to be paid, and what will happen to crypto prices in that timeframe? More importantly, what will happen to the value of the fiat currency in said timeframe?
Crypto Assets in Your Possession
Perpetual Assets IRA LLC is truly decentralized, a mechanism that the entire existence of crypto is built upon. This empowers the people, by and for the people, not financial institutions, custodians, and trustees. This platform allows you to control the storage of your crypto assets in your possession. This obviously eliminates counterparty risk but also provides you easy and fast access to your digital assets should you want to trade or take profits.
The competing centralized platforms only offer a handful of crypto coins and tokens for investment. What if you want to invest in projects that aren’t even traded on centralized exchanges? What if you want to move in and out of assets, and even asset classes?
With Perpetual Assets crypto IRA LLC you have investment flexibility. You can invest in any coin, token, pre-sale, ICO, or ITO, even a private Reg D offering: a pre-pre-sale. No crypto project is off limits. You can also easily trade assets. Our clients were able to easily and quickly take profits in the last crypto bull market cycle. With Perpetual Assets IRA LLC you can invest in anything IRS allowable in the same account. Take crypto profits directly into cash, gold, silver, real estate, or private equity. And, when done inside an IRA, all the profits are tax deferred, or tax-free in a ROTH (consult your CPA). Most importantly you make the decisions, you control the assets and their custody, and you do so without permission, without filling out a request or a form. Simply keep records of all investment transactions.
Perpetual Assets IRA LLC is much like operating your own mini hedge fund. The client is the manager of the LLC, which is owned entirely by his or her self-directed IRA account. The LLC company itself is a uniquely structured investment holding company. This is much like your IRA buying stock in a company like Microsoft, Chevron, or Caterpillar; only in this case your IRA is buying 100% of the shares of this newly formed investment company.
One of the final steps is securing a bank account- a business checking account in the name of the LLC. This bank account can be opened at your local bank or credit union. This is ultimately where your IRA dollars will be sent and from here you will make investments. You can execute checks or wires and make purchases of assets directly from this account, and you have full checkbook control.
The process takes us about 2-3 weeks to setup and has numerous legal and financial moving parts. It is our job to make this simple and palpable for the client. We do all the heavy lifting and ultimately are here to advise you on your investment options and avenues available.
We structure these for our clients so that the upkeep and maintenance is minimal. There are no tax returns to file and no inventory declarations. The client is responsible for keeping records of all transactions, should the client him or herself be audited. It should also be noted this process does not generate a flag or put your name on a list. The only public data available to the regulatory bodies is that you did a rollover from a conventional IRA or 401k into a self directed IRA. The LLC company is the investment on record. The LLC’s investment activity is entirely private.
At Perpetual Assets, we have been structuring IRA LLCs since 2012. We have also been accepting Bitcoin as a currency since inception and are actively involved in the industry as advisors and advocates. Our experience runs deep and broad with both cryptos and self-directed IRAs. Additionally we are students of finance and economics and lead the way in geopolitical analysis of the current macro paradigm. We are on the front line with new laws, regulations, and mergers and acquisitions.
The competition has only been around 12 months and offer an inferior and overpriced program. Do yourself a favor and see what we have to offer. Also, unlike the competition, we have no account size minimum. We have had clients over the years start these from scratch, funding with new dollars in order to take advantage of the tax benefits.
The IRA LLC was written into law by a congressional attorney. In fact it is industry insiders that use this platform to invest in private equity to realize astronomical gains inside a tax-free or tax deferred account. Yes, by law, it is also available to we common folk. The IRA LLC structure has been challenged in court and upheld every single time.
In fact, there was an IRS Field Service Advisory Statement #200128011 (April 6, 2001) where the IRS acknowledged that its challenge was unsuccessful and stated that they will no longer argue or “maintain” that the purchase of original “stock” (equivalent to Membership Interest in an LLC) by an IRA is a prohibited transaction under Section 4975(c)(1)(D) of the Internal Revenue Code.
There has, however, been ruling and penalty on prohibited transactions, such as a Florida man who used equity in his IRA LLC to issue a loan to another company in which he had an ownership interest. Self-dealing with IRA funds is prohibited. It is our job to walk you through the boundaries and parameters of investment. The law is pretty clear; you can manage and even handle certain IRA property. You cannot personally use or benefit from the property. If you buy real estate, you can touch it, but you cannot stay or live in it, until distributed to yourself as a personal asset.
Bob started an IRA LLC with Perpetual Assets in 2013. He rolled over an old 401k from his former employer where he had worked for most of his life. Bob started with about $200,000 in his retirement account. Bob invested in American Silver Eagle Coins and self directed the storage to a private vault near his home, not a depository in a far off land. A few years passed and Bob’s portfolio was not doing very well. The price of silver had dropped about 15% and wasn’t showing signs of recovery in the near future. Bob decided to sell half of the silver to the local vault.
Armed with about $80,000 in his IRA LLC checking account, Bob decided to enter the cryptocurrency markets. He bought some Bitcoin and Ethereum and stored them personally on a cold storage device. By early 2017 Bob started getting into ICOs. He sold his Bitcoin and bought into a handful of ICO projects that performed very well.
By the end of 2017 Bob’s IRA LLC valuation was over $4 million. He took some profits (not enough) back into U.S. Silver Eagle Coins, and balanced some of the ICO profits back into Bitcoin and Ethereum. He also bought a small studio apartment in a college town for rental income for his IRA LLC. Although he wished he had taken more profits, he still sits on about $2.75 Mil in his IRA LLC. Bob has not paid a penny in taxes and only will when he distributes the assets to himself in retirement.
Another Great Benefit
Another great benefit of IRA LLC is Bob can take out his assets in kind at retirement age. At 59 1/2 when eligible, or 70 1/2 when required, Bob will take out his assets in kind from his IRA LLC and claim an IRA distribution of the U.S. dollar value of the asset. In other words in the future when fiat will be more than volatile, Bob does not have to sell his crypto investments for U.S. dollars and distribute U.S. dollars to himself. He will take out the actual Bitcoin, Ethereum, and Silver Eagles, the new global currencies.
– Will Lehr Managing Partner & Co Founder www.perpetualassets.com