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Frequently Asked Questions

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If your previous retirement plan held only publicly traded securities such as stocks, mutual funds, or ETFs, your custodian would have reported the market value of those assets for you to the IRS. Publicly traded securities have an easily accessible market value; so, it is more cost effective for custodians of IRAs that only contain publicly traded securities to report the value without your participation.

No. The IRS would see this as a non-cash contribution, which is not allowed, to your account. You may hire the service providers of your choosing, but you must pay for their services using IRA dollars. (See Real Estate).

No. While you’re certainly able to open and fund an LLC with your self-directed IRA, you’re under no obligation to do so. Your IRA, 401(k), or HSA can purchase property directly (See Real Estate).

No, but designating account beneficiaries can help ensure your wishes are met in the unfortunate event of your passing. Your estate would inherit your account if you don’t name beneficiaries (See Beneficiary Designation).

Yes (except for precious metals and debt instruments). Accurate reporting to the IRS is of the utmost importance in self-directed retirement investing. If we are unable to fulfill our custodial duties by reporting fair market valuations, we may distribute the applicable assets to you.

Yes. The IRS requires annual (at a minimum) reporting on tax-advantaged accounts and the values of their holdings, even though qualified distributions from a Roth IRA would be 100% tax-free.

No. The IRS prohibits IRA holders from borrowing against their accounts. In contrast, many 401(k) plans have a provision in them that allows the participant to borrow (and pay back with interest) a certain amount from the plan. (See IRS Rules).

Yes. Your IRA may purchase metals certificates or ETFs, and/or your IRA can buy physical gold, silver, platinum, and palladium bullion of a designated fineness. (See Precious Metals).

Yes, if the plan document allows “alternative” assets. (See Real Estate).

Yes, at any time and as often as you like. You may add, remove, or update your beneficiaries as you see fit. Getting married, having children, or starting a business could prompt you to review your beneficiaries and make changes you deem necessary (See Beneficiary Designation).

Yes. Once you have made an in-kind distribution (withdrawal without liquidation) of a retirement asset, in its entirety, that asset will become your personal property to do with as you see fit. (See Distributions).

Yes. Your spouse, children, parents, or any other friends or family may be named as your beneficiaries. You may also designate an entity (a family trust, a charity, etc.) as your beneficiary if you so choose (See Beneficiary Designation).

You may establish a Solo 401(k) if you own an ongoing, revenue producing enterprise in a limited liability corporation (LLC), a sole proprietorship, a partnership, or an incorporated business (including an S-Corp) as long as you have no other employees. (See Solo 401(k)).

Yes. “IRA law does not prohibit investing in real estate …” IRS.gov (See Real Estate).

Yes. You may update your contact information by submitting our Change of Address form.

Yes. Per the hardship withdrawal rules set forth by the IRS, you may withdraw IRA funds prior to age 59 1/2 without incurring the 10% early distribution penalty if:

  • You have unreimbursed medical expenses that are more than 7.5% of your adjusted gross income.
  • The distributions aren't more than the cost of your medical insurance due to a period of unemployment.
  • You are totally and permanently disabled.
  • You are the beneficiary of a deceased IRA owner.
  • You are receiving distributions in the form of an annuity.
  • The distributions aren't more than your qualified higher education expenses.
  • You use the distributions to buy, build, or rebuild a first home.
  • The distribution is due to an IRS levy of the qualified plan.
  • The distribution is a qualified reservist distribution.

(See Distributions)

No. Even if you’re an expert in your alternative investment field, you must utilize a non-disqualified, third-party valuator.

Yes. You can secure your IRA-owned note with almost any type of collateral. (See Private Lending).

Yes. A self-directed IRA or HSA can increase its purchasing power by securing a”non-recourse” loan. (See Real Estate).

Yes, an IRA can be the title holder on real property, with or without debt. (See Real Estate).

Yes, an IRA can be tenants-in-common with many entities: a person, a company, an IRA, a trust, etc. (See IRS Rules).

Yes. You can negotiate with the lender or the property owner (with a pre-foreclosure) on behalf of your self-directed retirement account. All remaining debt will be paid out of escrow and the property will be titled in your plan’s name. (See Real Estate).

Yes. Spouse beneficiaries may treat inherited accounts as their own (meaning they may contribute, consolidate (transfer or roll funds from their other accounts), and distribute cash or assets at their discretion), or they may choose to treat the account as an Inherited IRA (See Inherited IRA).

Yes, a non-spouse beneficiary (or beneficiaries) may inherit your account. Non-spouse Inherited IRA holders may not make contributions or consolidate the account with their own (unless they inherited another account from the same decedent). They must also choose between taking required minimum distributions each year, gradually distributing the account over the course of the following five years, or distributing the full account upon receipt (See Inherited IRA).

In most cases, no. Investment earnings made by your IRA or HSA are tax deferred. If your IRA is invested in debt leveraged real estate or in an ongoing business that is not paying business tax at the corporate level, your IRA may be subject to Unrelated Business Income tax on some of the earnings (See UBIT).

Yes. In fact, when there is an impending distribution or conversion of non-cash assets, there may be more formal valuation of those assets required.

Yes. RMDs are calculated using the value of all your IRA assets. Fair market valuation of non-cash assets must be current as of December 31st, the previous year.

Once your account is open and funded, you may contact the precious metals dealer of your choosing to establish the terms of the transaction. You will submit our Buy Direction Letter to affirm your agreement to the transaction. When the deal is in place, your dealer will forward the invoice to our office for processing. With a complete BDL and an invoice from the dealer, New Direction Trust Company will wire your IRA funds to fulfil the purchase. Your IRA’s metals will be sent to your chosen depository (See Precious Metals).

Identify a suitable property (with or without the help of your chosen real estate professional). You will submit a Buy Direction Letter to New Direction Trust Company to indicate your intention and permission to have your IRA purchase the property. Please note that instead of your using your personal name as the buyer on the offer, closing docs, etc., your IRA’s name will be used as the buyer/owner on all documents associated with the asset. Oversee the preparation of closing documents in the same way you would if you were making a purchase with non-IRA funds. On all the documents, the account holder signs underneath a “read and approved” in the margin to indicate your approval. (See Real Estate).

Engage the services of a qualified third party to make the valuation and request valid supporting documentation. Precious metals and promissory notes do not require action on your part for an annual valuation.

Complete our online application in a matter of minutes or contact our office for more information: 877.742.1270 or info@ndtco.com.

New Direction Trust Company makes it easy to pay your fees online. You can also give us a call at 877.742.1270 to provide credit card information or mail a check to our office:

New Direction Trust Company
1070 W. Century Drive
Louisville, CO 80027

The easiest way for renters/borrowers to pay your IRA is to submit online payments that you may track through your myDirection® portal. Renters and borrowers may also send checks to New Direction Trust Company accompanied by a deposit coupon. The payee on the check is the name of your IRA.

To set up automatic monthly payments, please complete and submit our Authorization Agreement for Direct Withdrawals.

Timeframes for real estate IRA investments may differ due to the high number of variables inherent to each individual transaction, but it is not atypical to close an IRA purchase in the same time frame as a non-IRA purchase. Keep in mind:

  • It takes two business days to establish your IRA with NDTCO upon receipt of your application (usually occurs within one business day) if you do not already have an account with us.
  • It commonly takes 5-20 business days to fund the account via transfer or rollover (some resigning custodians will surrender your funds faster than others) if you do not already have cash available in your NDTCO account.
  • New Direction Trust Company requires submission of complete and accurate closing documents three full business days prior to the closing date. During this time, we will review the documentation and affirm IRS compliance. We will issue funds to fulfil the investment upon completion of this review process (See Real Estate).

At NDTCO, we average about 12 business days as long as you move your stocks, mutual funds, and other publicly traded securities in-kind. Once we have control of them, you can have us liquidate them at your discretion.

See our Transfers & Rollovers page for additional information.

Any IRA custodian you’ve ever worked with has reported the year-end value of your account to the IRS. However, stocks and mutual funds bear widely accepted market values which are easily accessed, while alternative assets do not. Since your NDTCO account holds alternative assets, it becomes the account holder’s responsibility to supply New Direction Trust Company with fair market value information for your unique holdings (not including precious metals and debt instruments).

At NDTCO, you have 3 employer options:

  • SEP IRA – The same tax benefits of a Traditional IRA but a significantly higher annual contribution limit.
  • Solo 401(k) – Allows you to make employee and employer contributions to the same plan, but only if you don’t have any other employees.
  • SIMPLE IRA – If you want to offer your employees some matching contributions, SIMPLE IRAs provide an easy way to do that on a limited basis.

See our Account Types page for additional information.

Anywhere property is sold! You can shop online, utilize a broker, or browse property on your own. There are some restrictions related to who your IRA can buy real estate from. (See Real Estate).

No. You’ve had the freedom to incorporate alternative investment options into your retirement strategy since IRAs began in the 1970s. Finding an IRA provider that would handle alternative assets was relatively difficult until recently(See Investment Opportunities).

You may seek non-recourse financing on behalf of your self-directed IRA. “Non-recourse” means the IRA-owned property itself would be the only collateral on the note; your (as well as any other DQ person’s) personal assets may not be offered as security for the loan. Contact New Direction Trust Company for additional information and a list of non-recourse lenders.

The IRS allows almost anything you can imagine as assets in self-directed IRAs, 401(k)s, and HSAs. Key exceptions include life insurance and collectibles. Real Estate, private equity (or stock), private debt instruments, and precious metals are a few of the possibilities (See Investment Opportunities).

“Alternative asset” commonly refers to investments that are not publicly traded securities (stocks, mutual funds, ETFs, etc.). At New Direction Trust, your account can incorporate the alternative investments such as:

  • Real Estate
  • Precious Metals
  • Private Equity
  • Private Lending/debt instruments
  • ...and much more!

See our Investment Opportunities page for additional information.

Almost anything you can think of! Apart from life insurance and collectables, a self-directed retirement plan with New Direction Trust Company can acquire real estate, precious metals, and almost anything else that you can legally earn money with (See Investment Opportunities).

NDTCO satisfies the IRS stipulation, which many of the most common tax-advantaged accounts have, to be held in the custody of a qualified third-party entity. In addition to fulfilling this legal obligation, New Direction Trust Company provides annual tax documents to both you and the IRS; offers 24/7 online access to your account through myDirection® and direct access to live representatives during business hours; and performs rigorous reviews of pending investments to help mitigate the possibility of prohibited transactions.

Your fees will depend on the assets in which your account invests:

IRA holders may designate beneficiaries to their accounts. These individuals will inherit the account and its holdings if the original account holder passes away. Accounts without beneficiaries will become property of the decedent’s estate (See Beneficiary Designation).

“Precious metals IRA” is merely a descriptor for a self-directed IRA that holds one or more of the physical precious metals that the IRS allows in an IRA: gold, silver, platinum, or palladium (See Precious Metals).

A Solo 401(k) is simply a 401(k) for a person who is self-employed. (See Solo 401(k)).

Unrelated Business Income Tax. Self-directed IRAs may be subject to UBIT if they derive earnings from an ongoing business operating within a pass-through entity for tax purposes or from debt-financed real estate (See UBIT, UBTI & UDFI).

At New Direction Trust Company, you have three options for your Solo 401(k):

  • Plan Document Only – If you need a Solo 401(k) but would prefer to handle the recordkeeping yourself, you can lease our plan document without engaging our recordkeeping services.
  • Recordkeeping Only – We can provide recordkeeping services if you already have a plan document; you’re under no obligation to lease ours.
  • Full Service – You may lease our plan document and utilize our recordkeeping services.

See our Solo 401(k) page for additional information.

In most cases, you have until tax day (typically April 15 or thereabouts) the following calendar year to contribute for a particular tax year. However, depending on your account type, you may have until your filing date including extensions (See Contributions).

They're similar; however a Solo 401(k) plan is used for self-employed persons (and their spouse if the spouse also works for the business).

  • Most 401(k) plans adopted by employers who have multiple employees are limited to investing in publicly traded securities.
  • At New Direction Trust Company, self-employed persons can adopt a Solo 401(k) document which allows alternative investments to be assets of the plan.

See our Solo 401(k) page for additional information.

Both account types are used to meet the needs of self-employed individuals. However, several key distinctions may help determine which account type is best for you. Contact your accountant or tax professional to discuss your unique situation (See Account Types).

New Direction Trust Company does not recommend or endorse any particular course of action when it comes to self-directed investing. NDTCO encourages you to consult with your financial team, tax professional and/or legal team when reviewing your options. When it comes to choosing your self-directed account type, some (but certainly not all) key factors may include:

  • Your age
  • Your desired tax benefit – In a nutshell, you could pay no taxes now and fewer taxes later (Traditional IRA, SEP IRA, etc.) or full taxes now and no taxes later (Roth IRA, if qualified).
  • Your existing accounts – If you intend to transfer or roll funds from an existing IRA to acquire alternative IRA investments with us, you may consider opening a similar IRA account type to help ensure a smooth consolidation process.
  • Type of investments you wish to make
  • Contribution strategy
  • Distribution strategy

Your unique situation will ultimately help determine a path that suits your needs and comfort level. (See Account Types).

The IRA account holder, his or her parents, children, grandparents, grandchildren, and the spouses of children and grandchildren. In addition to that, any fiduciaries to the account are among those disqualified from engaging in certain actions with the account (See IRS Rules).

Any expenses incurred through the fair market valuation process must be paid by the account itself; you may not cover any such costs with non-IRA funds.

New Direction Trust Company can only accept a fair market valuation if:

  • The valuation process is conducted by a non-disqualified third party individual or entity.
  • You provide valid supporting documentation to affirm the valuation.
  • You complete and submit our Fair Market Valuation form.

Omission or incorrect submission of any these elements will cause the fair market valuation to be rejected.

You may be required to distribute some or all of your self-directed account if:

  • You hold a Traditional IRA, SEP IRA, SIMPLE IRA, or Solo 401(k) and you reach age 70 ½; annual required minimum distributions begin at this time.
  • You inherit an IRA from someone other than you spouse. You may elect to take “lifetime” annual required minimum distributions; fully distribute the account over the course of the following five years; or distribute the account all at once.
  • Your designated beneficiary on a Coverdell ESA reaches age 30 or passes away prior to reaching age 30.

See our Distributions page for additional details.

No, in most cases your beneficiary designation bypasses probate (See Beneficiary Designation).

No. New Direction Trust Company does not recommend or endorse asset providers, including precious metals dealers. You may choose the precious metals dealer that best suits your needs (See Precious Metals).

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