Q: Can I contribute fiat currency (USD) directly to my Crypto IRA?
A: Yes. You can transfer funds via ACH or Wire to your custodial account, which are then converted to USDC (a stablecoin) and made available for trading. Direct crypto contributions are not allowed as they violate IRA non-commingling rules.
Q: What is a "Prohibited Transaction" and how do I avoid it?
A: A prohibited transaction is any transaction that benefits you personally from the IRA assets (e.g., borrowing funds, purchasing a home, or personally guaranteeing a loan). The most common risk is **self-dealing**—using IRA assets for a personal purpose. Do not attempt to transfer IRA crypto to a wallet or exchange you personally control.
Q: Is my crypto taxed upon distribution?
A: It depends on the account type. **Roth IRA** distributions are generally tax-free, provided the 5-year aging rule is met and you are over 59.5. **Traditional IRA** distributions are taxed as ordinary income upon withdrawal in retirement. All growth within the account is tax-deferred or tax-free.
Q: What is the process for a direct rollover?
A: A direct rollover is the safest method. The custodian (iTrustCapital) directly communicates with your previous retirement provider (e.g., 401k or Traditional IRA custodian) to transfer funds. This avoids the 60-day indirect rollover rule, which carries the risk of taxation if not completed correctly.
Q: How does iTrustCapital report gains/losses to the IRS?
A: We generate required tax forms (e.g., Form 5498 for contributions, Form 1099-R for distributions) for you and the IRS. Since capital gains within the IRA are sheltered (tax-deferred or tax-free), you will not receive a Form 1099-B (Brokerage Transaction) for trading activity *inside* the IRA.