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Self directed IRAs under attack in proposed tax bill

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Re: Self directed IRAs under attack in proposed tax bill

#301

Post by idiotsecant »

jfrunyon wrote: post #245
caseysoftware wrote: post #203

Earlier quoted context omitted.

There are companies like Rocket Dollar that handle the paperwork for you for $15/month. Not mainstream but not a secret either.

I don't think too many "peasants" would be able to make $15/month from it, much less any actual gain.

No? I think just about any dummy (myself included) with a RD LLC that put money into crypto Q3 of last year paid for centuries of RD fees in a few weeks. The whole point is that it's a casino with some rational guesstimates behind it. You take a chunk of your retirement that wouldn't sting too bad if you lose it and you invest it in something that is wildly speculative but that you think has a high upside. Either you go broke with a small chunk of your total nest egg, or you turn that small chunk into something many times the size of your "main" nest egg.

Re: Self directed IRAs under attack in proposed tax bill

#302

Post by idiotsecant »

nodesocket wrote: post #206
idiotsecant wrote: post #133

Earlier quoted context omitted.

This is the killer, indeed. Checkbook IRAs are amazing retirement tools if you're interested in using some of your retirement money in high-risk, high-reward investments. My retirement fund benefited enormously from the Q3 2020 crypto market gains, which would not have been possible without my LLC. It's hard to see this as anything other than removing all the peasants from the market so that the big dogs can have it…

> My retirement fund benefited enormously from the Q3 2020 crypto market gains, which would not have been possible without my LLC. I have a single member LLC and a simplified employee pension plan (SEP), but don't understand how one gets crypto into a SEP without buying something like Grayscale (GBTC) through the open stock market.

rocket dollar ( or similar service ) creates a single member LLC with checkbook self-directed IRA fund access. They become your self directed IRA trustee. You then create a bank account in the name of the LLC, followed by an account with coinbase or similar under the taxID of your new LLC. You transfer money from your LLC bank account to coinbase LLC account (being careful to never comingle wallets with personal accounts) and do whatever you need with it. You can pull the crypto out of coinbase and hold it in a wallet if you want as well (as long as you bought that wallet with 401k funds)

Re: Self directed IRAs under attack in proposed tax bill

#303

Post by idiotsecant »

nodesocket wrote: post #213
tylersmith wrote: post #211

Earlier quoted context omitted.

The LLC creates an account at e.g. Gemini. Talk with your trustee about it first.

trustee? Lol, it is just me. I thought that crypto exchanges don't let business entities open accounts. If they do, if I open an account at Gemini under my LLC how then do I get that into my SEP though?

You shouldn't be so quick to jump to assuming someone doesnt know what theyre talking about. Trustee is a technical term with meaning in this context. You should look into self-directed 'checkbook' IRAs.

Re: Self directed IRAs under attack in proposed tax bill

#304

Post by idiotsecant »

whoopdedo wrote: post #158
idiotsecant wrote: post #133

Earlier quoted context omitted.

This is the killer, indeed. Checkbook IRAs are amazing retirement tools if you're interested in using some of your retirement money in high-risk, high-reward investments. My retirement fund benefited enormously from the Q3 2020 crypto market gains, which would not have been possible without my LLC. It's hard to see this as anything other than removing all the peasants from the market so that the big dogs can have it…

Peasants with LLCs... Sure. And using crypto as an example only strengthens the argument that what you're doing is a tax dodge.

How so? I still have to report value of the account to the IRS by law, which is enforced by the trustee. If I get audited it's stunningly easy for the IRS to trace from dollars in IRA to crypto bought and sold, including profits taken. I think you're overestimating your understanding of the whole process.

Re: Self directed IRAs under attack in proposed tax bill

#305

Post by loourr »

CPLX wrote: post #241
loourr wrote: post #217

Earlier quoted context omitted.

Roth IRAs are pre tax so even if this bill passes Peter Thiel won't have to pay any taxes on his $5B.

This comment is factually inaccurate. Roth IRA's are post-tax, that's the whole point of them. You put money in after paying tax and then you're done, when you withdraw for retirement it's tax free. If this bill passes as written he would actually be forced to divest assets out of his Roth IRA and then pay taxes on them now. It's a really substantive change, hence the discussion.

You're right that I mixed up pre and post but that's exactly the point. It's post tax so he's ALREADY PAID TAXs and therefor will pay nothing when the funds are distributed.

Re: Self directed IRAs under attack in proposed tax bill

#306

Post by seshagiric »

lotsofpulp wrote: post #227
wahern wrote: post #210

Earlier quoted context omitted.

All good points. Except I'd say that a major problem with annuities is one of bargaining power and purchaser sophistication, similar to why employer-based health insurance plans are better deals then open market plans even after Obamacare reforms. (Though HMOs like Kaiser seem to have a smaller gap.) Annuity return rates suck relative to pensions and especially stock market returns (ignoring potential long-term risk)…

> Except I'd say that a major problem with annuities is one of bargaining power and purchaser sophistication, similar to why employer-based health insurance plans are better deals then open market plans even after Obamacare reforms. Health insurance, like life insurance and annuities, is pretty efficient already with low single digit profit margins. Average annual employer sponsored insurance is $7,675 for single PPO…

"...Same reason why whole life insurance is a scam. All of these products have been automated and their middlemen bypassed..."

What are the DIY alternatives to whole life?

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