Frequently Asked Questions

Frequently Asked Questions

Opening a self-directed IRA is a big step toward financial independence and your retirement. But as with any major financial decision, it’s important to have all the facts. That’s why we’ve highlighted our most commonly asked questions and provided a set of clear, straightforward answers.

Learning About Self-Directed IRAs

  • What is a self-directed IRA?
    A self-directed IRA is a retirement account that puts you in control of your IRA investment. Unlike most retirement accounts whose investments are chosen by an account and/or fund manager, you choose what to invest in with a self-directed IRA. This allows you to diversify your retirement portfolio’s investment and potentially maximize returns.
  • Are investments in a self-directed IRA insured?
    The cash held in your STRATA custodial account is FDIC-insured up to $250,000, but any other investments held by your IRA are not FDIC-insured, are not guaranteed by STRATA and may lose value.
  • Are self-directed IRAs a target for potential fraud?
    While self-directed IRAs can be a safe way to invest retirement funds, investors should be mindful of potential fraudulent schemes when considering a self-directed IRA. Investors should understand that the custodians and trustees of self-directed IRAs may have limited duties to investors and that the custodians and trustees for these accounts will generally not evaluate the quality or legitimacy of an investment and its promoters. As with every investment, investors should undertake their own evaluation of the merits of a proposal and should check with regulators about the background and history of an investment and its promoters before making a decision. Learn more about how to protect yourself from fraud.
  • Are self-directed IRAs reported to the IRS?
    Yes. As with any IRA custodian, STRATA is required to file Form 5498 with the IRS each year as well as Form 1099R (if applicable).
  • Can I have a self-directed IRA if I participate in a retirement plan at work?
    You can have a Traditional or Roth IRA whether or not you participate in another retirement plan through your employer or business. However, you might not be able to deduct all of your Traditional IRA contributions if you or your spouse participates in another retirement plan at work. Roth IRA contributions might be limited if your income exceeds a certain level.
  • Does STRATA offer any investment products or investment advice?
    As an IRA custodian, STRATA does not sell investment products or provide investment advice. Custodians do not provide investment, tax or legal advice, so clients needing these services are urged to contact their professional advisor.

Investment Options

Real Estate (Directly-Owned)

  • Are there any types of property that STRATA will not hold?
    Yes. STRATA will not process certain investments including, but not limited to, timeshares, foreign real estate or property purchased through an auction or tax sale.
  • Can my IRA purchase a portion of a property along with other investors?
    Yes, but only if the other owners are not disqualified persons. The deed must also specify the undivided interest owned by each party.
  • Do I need to provide STRATA with a property appraisal?
    After the initial purchase you will be required to provide either an updated appraisal or our Real Estate Valuation Form completed by an appraiser, broker or realtor on an annual basis. In addition, a new appraisal will be required for any taxable event such as an in-kind distribution of the property or Roth IRA conversions.
  • Can my IRA use leverage to finance a real estate purchase?
    Yes, an IRA-owned property may be debt-financed, but only with a non-recourse note. The property must be the only collateral for the loan, and all payments must be made from your IRA. You cannot guarantee the loan personally or make payments on the loan out of pocket. In addition, debt-financed property in an IRA may be subject to unrelated business taxable income (UBTI). For more information, please consult your tax advisor.
  • Does rental income have to be deposited in my IRA?
    Yes. All rental income must return to your IRA. STRATA requires you to appoint an unrelated third party to act as the property manager for income-producing property. The property management agreement will be provided by the property manager and will be signed by you and the property manager. Your third-party property manager may also pay expenses from rents received if STRATA is provided with a monthly or quarterly report of income received and expenses paid. The report should accompany the property manager’s deposit check (if any).
  • Can I pay the earnest money deposit out-of-pocket to secure the contract for my IRA?
    No. The earnest money deposit must be funded by your STRATA account. You cannot use personal money for the deposit and then be reimbursed later. You will need to send a copy of the contract or purchase agreement to STRATA along with an Earnest Money Deposit Authorization to remit the earnest money from your IRA to the title company or closing attorney.
  • Does STRATA provide any management services with regards to the property?
    No. You must appoint a property manager to handle all property servicing functions, and you are responsible for monitoring the performance of the property manager. Please refer to STRATA’s Investment Checklist for Real Estate.
  • Can I use the property held within my IRA?
    Neither you nor any other disqualified person can have any personal use or benefit of the property while it is held in your retirement account. The property must be purchased for investment purposes only.
  • Can my account invest in real estate through a Limited Partnership or Limited Liability Company?
    Yes. If real estate is being acquired through an entity such as an LP or LLC and your IRA will hold an equity interest in the entity, please refer to and provide the items shown on STRATA’s Investment Checklist for Private Equity. If your IRA will be originating a loan that will be secured by a mortgage or deed of trust, please refer to and provide the items on STRATA’s Investment Checklist for Private Debt.
  • How are expenses and/or improvements handled for real estate held in my IRA?
    All earnest money deposits, insurance premiums, taxes, debt payments or other expenses of the property (including any improvements) must be paid by the IRA to an unrelated third party. A copy of the invoice or tax notice must be provided to STRATA along with a completed and signed Expense Payment Form. You may not pay for an expense out-of-pocket or on a credit card and remit the statement for payment. STRATA will not process payments to a credit card issuer.
  • Do I need to carry liability insurance on property held in my IRA?
    If you choose to carry liability insurance on the property, the named insured must be STRATA Trust Company Custodian FBO (Account holder name) IRA (Account #), and the annual premium must be paid directly to the insurance company by your IRA. You cannot add the IRA property to your personal homeowner’s policy or list your IRA as an additional insured.
  • How do I report income and expenses in an IRA?
    An IRA-owned property may be rented or leased, as long as the rental income flows back to the IRA. Property that is rented or leased requires a third-party property manager which cannot be the IRA owner. Also, keep in mind that your IRA will need to retain enough uninvested cash to cover all expenses such as property taxes, improvements and even the earnest deposit.
  • How is title held on property in an IRA?
    The property must be held in the name of STRATA Trust Company Custodian FBO (Account holder Name) IRA (Account #). This is how the purchase contract, title commitment/insurance, deed and liability insurance must be titled.
  • If I decide I want to use the property in my IRA, how do I take possession of the property?
    You may withdraw the property from your account as an in-kind distribution (at the current market value) and pay any taxes and/or possible penalties if you are under age 59½. You will need to provide STRATA with a completed and signed Distribution Form and a deed prepared for STRATA’s signature that conveys the title of the property from your IRA to you individually. You will also need to provide either an updated appraisal or our Real Estate Valuation Form completed by an appraiser, broker or realtor.
  • May I purchase foreclosure property with my IRA?
    Only if the property has already been foreclosed upon and you can provide all the items on STRATA's Investment Checklist for Real Estate. However, STRATA will not process a foreclosure purchase directly through an auction or tax sale.
  • May I sell property that I currently own to my IRA?
    No. Property that you or a disqualified person has ever owned is not eligible to be purchased by your IRA since this would be a prohibited transaction.
  • What is a prohibited transaction?
    In general, Internal Revenue Code Section 4975 defines a prohibited transaction as a transaction between a plan (your account) and a disqualified person. Generally, "disqualified persons" are defined to be the account holder, other fiduciaries, certain family members (lineal descendants and spouses of lineal descendants) and businesses under the account holder’s (or disqualified person’s) control. The prohibited transaction rules prohibit an IRA from acquiring a piece of property which will be purchased from or used personally by the account holder or other disqualified persons.
  • What is the process to sell property within my IRA?
    Please refer to our Real Estate Sales Checklist for complete information on selling property owned by your IRA.
  • What types of property can I purchase with my IRA?
    You may purchase vacant lots, raw land and income-producing property such as rental houses, condominiums or commercial real estate.
  • When I sell the property in my IRA, can the IRA seller finance the transaction?
    Yes. Once the property is sold, you may carry the note and deed of trust/mortgage within your account. The principal and interest payments will be deposited into your STRATA account, and you can reinvest the cash however you choose. Please see STRATA’s Investment Checklist for Private Debt.
  • Who should be listed as the buyer on the real estate contract?
    The contract or purchase agreement must list STRATA Trust Company Custodian FBO (Account holder name) IRA (Account #) as the buyer. You (or other disqualified persons) cannot be listed as the buyer and then later assign the contract to your IRA.

Private Equity

  • Are there any types of investments that STRATA will not process?
    STRATA will not process investments including, but not limited to, single-member entities, family-owned entities (owned 50% or more by family members), foreign entities, joint ventures and/or oil and gas working interests. Please contact us prior to establishing your account to be sure your private equity investment is something STRATA can process.
  • Can my STRATA account invest in an entity that I or a family member owns or controls?
    If your IRA invests in an entity that you or certain family members own or control (whether controlled individually or as an officer of a corporate general partner), the transaction could be a prohibited transaction under Internal Revenue Code Section 4975. If you or another disqualified person is an officer or director of an entity (or an officer or director of a corporate general partner, managing member, etc.), and you will collectively own 10% or more of the entity, STRATA Trust Company will require you to obtain a legal opinion from a tax attorney addressed to you in which the transaction is discussed in detail prior to processing your investment instructions. If you or any family member or disqualified persons collectively will own 50% or more of the entity, STRATA will not process the investment even if you are able to obtain a legal opinion.
  • What is a prohibited transaction?
    Internal Revenue Code Section 4975 defines a prohibited transaction as a transaction between a plan (your account) and a disqualified person. In general, "disqualified persons" are defined to be the account holder, other fiduciaries, certain family members (lineal descendants and spouses of lineal descendants) and businesses under the account holder’s (or disqualified person’s) control. Please review the Code for specific information and definitions. Other useful resources are Publications 560 and 590.
  • What is the maximum ownership interest that a STRATA account can own in an entity in conjunction with other disqualified persons or family members?
    STRATA will not process an investment where 50% or more of the entity will be owned by your STRATA account and other disqualified persons (including family members).
  • What is Unrelated Business Taxable Income?
    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 for any taxable year, IRS Form 990-T must be filed along with the appropriate amount of tax, payable from your account. STRATA does not monitor UBTI and does not prepare Form 990-T. If the tax is applicable, you must prepare, or have prepared, Form 990-T and forward it to STRATA along with an Expense Payment Form to pay the tax from your account. If you are required to file Form 990-T, you must apply for and utilize an Employer Identification Number (“EIN”). You may not use STRATA’s EIN or your Social Security number. For more information on UBTI, please refer to IRS Publication 598 and/or consult with your tax advisor.
  • What types of private equity investments can I hold within my account?
    Types of private equity investments that STRATA will process include limited partnerships (LPs), limited liability companies (LLCs), C-corporation stock and real estate investment trusts (REITs).

Private Debt

  • Are there any types of debt investments that STRATA will not process?
    STRATA does not process unsecured loans to individuals or loans secured by vehicle titles, foreign real estate and/or personal property. If you are uncertain whether STRATA can process the type of debt you have in mind, please contact us first.
  • Does there need to be a servicing agent to monitor the collection and terms of the debt instrument?
    Yes. As a directed custodian, STRATA does not provide these services and requires the account holder to either enter into a Debt Servicer Agreement with a third party or to act as his/her own agent. Please review the debt checklist for complete details and requirements.
  • Can my account loan funds to family members or to an entity that I or a family member owns or controls?
    If your IRA loans funds to certain family members (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 Internal Revenue Code Section 4975. STRATA’s policy on this issue is that if you or another disqualified person is an officer or director of the borrowing entity (or an officer or director of a corporate general partner, managing member, etc.), and you will collectively own 10% or more of the entity, then you will need to obtain a legal opinion from an ERISA or tax attorney addressed to you in which the loan transaction is discussed in detail prior to STRATA processing your investment instructions. If you, any family member or disqualified persons collectively will own 50% or more of the borrowing entity, STRATA will not process the investment even if you are able to obtain a legal opinion.
  • How should payments be sent to STRATA?
    Payments from the borrower or servicing agent should be sent to STRATA along with a completed Deposit Certification. If a payoff is being wired to STRATA, the borrower or servicing agent should provide a copy of the Deposit Coupon via email or fax.
  • What do I need to provide to STRATA when a secured loan is paid off or sold?
    You will need to provide STRATA with a request for reconveyance, satisfaction of mortgage, assignment, transfer of lien, etc., along with a letter of instruction for STRATA to sign the instrument and send all original loan documents to the title company or agent handling the payoff or sale.
  • What happens if the borrower defaults on a deed of trust/mortgage held by my account?
    You may direct your servicing agent to initiate foreclosure proceedings. Please review STRATA’s Real Estate Processing Checklist for the items you will need to provide in order for your account to hold title to any property acquired through a foreclosure.
  • What types of debt investments can I hold within my account?
    Types of private debt investments that STRATA will process include, but are not limited to, notes secured by deeds of trust/mortgages/security agreements, crowdfunding debt offerings and convertible notes.

Crowdfunding

Futures

Gold and Precious Metals

  • Does STRATA buy, sell or exchange Precious Metals?
    No, STRATA does not buy, sell or exchange precious metals. You will need to negotiate the purchase, sale or exchange of any precious metals through the broker of your choice.
  • What research should I do before I choose a Precious Metals dealer?
    We encourage you to do your own research and educate yourself before choosing a dealer and buying precious metals with your IRA funds. Few states have regulatory oversight of precious metal dealers. Therefore, it's important that you do your own due diligence to protect your retirement savings.
    1. Use sites such as the Better Business Bureau (www.BBB.org) to find whether the dealer is accredited and rated, how long the dealer has been in business, and review the dealer's history of any consumer complaints or disputes. Be aware of any dealer that you can't find any information about.
    2. Check to see if the dealer is a member of any industry trade groups such as American Numismatic Association (ANA), Professional Numismatics Guild (PNG), and Industry Council for Tangible Assets (ICTA). To be a member, dealers must agree to abide by a code of conduct and be willing to resolve customer disputes.
    3. Be aware of dealers that use high-pressure sales tactics in their sales calls to try to get you to do business with them - and don't reveal any personal information about your income, your age or your assets, including how much you may have in savings or retirement accounts.
    4. Read the recent Precious Metal Fraud Advisory issued by the U.S. Commodity Futures Trading Association, and view the CFTC's consumer protection video on Precious Metals Fraud.
    5. Be familiar with the different pricing terms (spot, bid and ask) and understand what they mean.
     
  • How do I open a Precious Metals IRA account?
    Step 1: Open an account. ● To open an IRA, visit our Open an Account page or download the IRA kit on our Forms page for the type of IRA you wish to open (Traditional, Roth, SEP or SIMPLE IRA). ● Complete the forms and submit them either electronically or by U.S. mail and include your payment of IRA Fees and the Precious Metals Storage Fee. You may pay by check or credit card. If by credit card, please complete our Credit Card Charge Form. If payment is not included, the fees will be deducted from the transfer, rollover or contribution funds prior to STRATA processing the purchase. Note: The depository storage fee is an annual fee due at the time the storage account is opened and annually in conjunction with your IRA renewal fee. Both fees will be billed by STRATA at the time the IRA is opened and each year afterward during the anniversary month of the IRA account opening. Fees will not be prorated. Step 2: Fund your IRA with a rollover, transfer or contribution. IRA Transfer ● The IRA can be funded through an IRA to IRA transfer. Simply complete the Transfer Request Form included in the IRA Kit. ● Mail the completed and signed IRA Transfer Request Form to STRATA Trust Company 7901 Woodway Drive, Suite 200 Waco, TX 76712. 401(k) Rollover ● A direct rollover from a 401(k) or other qualified retirement plan is another way to fund your self-directed IRA. Contact the plan administrator to obtain the form(s) needed to request or authorize a direct rollover. IRA Contribution ● If eligible, you can make an annual IRA contribution to fund your Precious Metals IRA. See our IRA Annual Limits chart.Learn more about rollovers, transfers and contributions. Step 3: Once funds are available in your IRA, choose a precious metals dealer and place your trade. ● You determine the precious metals dealer you wish to use, and you will negotiate the precious metals to be purchased and place your precious metals buy order directly with the dealer. Step 4: Authorize STRATA Trust Company to remit payment for your purchase. ● To authorize, simply sign and date the dealer's precious metals order ticket or complete and sign our Precious Metals Investment Direction Form and submit with the order ticket. The order ticket must be itemized to show the type, quantity and price of the precious metals purchased. ● Fax it to STRATA at 512-495-9554. ● Upon receipt, STRATA will remit payment to the precious metals dealer and provide the dealer with instructions for delivery of the precious metals to the depository.
  • What types of Precious Metals can I invest in?
    To qualify as IRA allowable precious metals and be accepted by STRATA, the following minimum fineness requirements must be met:
    • Gold must be 99.5% pure, silver must be 99.9% pure, and platinum and palladium must both be 99.95% pure.
    • Bars, rounds and coins must be produced by a refiner, assayer or manufacturer that is accredited/certified by NYMEX, COMEX, NYSE/Liffe, LME, LBMA, LPPM, TOCOM, ISO 9000, or national government mint and meeting minimum fineness requirements.
    • Proof coins must be encapsulated in complete, original mint packaging, in excellent condition, and include the certificate of authenticity.
    • Small bullion bars (other than 400-ounce gold, 100-ounce gold, 1000-ounce silver; 50-ounce platinum and 100-ounce palladium bars) must be manufactured to exact weight specifications.
    • Non-proof (bullion) coins must be in brilliant uncirculated condition and free from damage.
    To see examples of IRA-allowable gold, silver, platinum and palladium coins and bullion, please visit our Gold & Precious Metals section (see the "Types" tab).
  • Are there any Precious Metals that cannot be held in an IRA?
    Precious metals which do not meet the following minimum fineness requirements do not qualify as IRA allowable precious metals and will not be accepted by STRATA:
    • Gold must be 99.5% pure, silver must be 99.9% pure, and platinum and palladium must both be 99.95% pure.
    • Bars, rounds and coins must be produced by a refiner, assayer or manufacturer that is accredited/certified by NYMEX, COMEX, NYSE/Liffe, LME, LBMA, LPPM, TOCOM, ISO 9000, or national government mint and meeting minimum fineness requirements.
    • Proof coins must be encapsulated in complete, original mint packaging, in excellent condition, and include the certificate of authenticity.
    • Small bullion bars (other than 400-ounce gold, 100-ounce gold, 1000-ounce silver; 50-ounce platinum and 100-ounce palladium bars) must be manufactured to exact weight specifications.
    • Non-proof (bullion) coins must be in brilliant uncirculated condition and free from damage.
    The following list contains examples of precious metals that cannot be held in an IRA.
    Any rare or collectible coin Chilean Peso Hungarian Korona
    Austrian Corona and Ducat Columbian Peso Italian Lira
    Belgian Franc Dutch Guilder Mexican Peso and Onza
    British Brittania (pre-2013) French Franc South African Krugerrand
    British Sovereign German Mark Swiss Franc
     
  • Does STRATA offer a home storage option for Precious Metals?
    No. Per IRS guidelines, IRA-owned assets must remain in the custody of the IRA custodian (STRATA) until distributed or sold. This means that you can’t personally hold IRA-owned precious metals while in the IRA.  STRATA requires that your precious metals be stored with a third-party depository as outlined above.  
  • Where are my STRATA IRA-owned Precious Metals stored?
    In compliance with IRS rules, you may not hold precious metals yourself while owned in an IRA. Your IRA-owned Precious Metals will remain in the custody of STRATA, and placed with STRATA’s preferred depository (Delaware Depository) for storage and safekeeping. For existing customers of Brink’s Global Service, you may elect to add metals to your existing account by connecting with Service@STRATATrust.com.  
  • Can I take possession of my Precious Metals after investing?
    As required by law, you may not take possession of or control your Precious Metals while held in your STRATA IRA. You may, however, take an “in-kind” distribution of precious metals from the IRA at any time. The distribution is a taxable event, which means it will be reported to the IRS and may also be subject to withdrawal penalties. As always, consult your tax professional regarding these matters prior to taking any action. To take an in-kind distribution of all or part of your Precious Metals, complete our IRA Distribution Request for Precious Metals form, available on our Forms menu.
  • How do I authorize a buy, sell or exchange order for Precious Metals?
    You will place your buy, sell or exchange order for Precious Metals with the dealer of your choice.  Once your transaction has been initiated with your dealer, you will need to complete and submit STRATA's Precious Metals Investment Direction and Disclosures form as directed.  This form is available in our Forms menu.
  • Why does my STRATA account statement show a value of my Precious Metals that is less than what I invested?
    The fair market value shown on your STRATA account statement and on our online Account Access portal is based on spot value, which is the current spot price multiplied by the ounces of fine metal contained in the coin or bar.  Spot values do not include any mark-ups, mark-downs, premiums or commissions. The actual precious metals type and quantity of a transaction may affect the price received for any given bullion item. Spot values should be used as an indication of value only and should not be construed as a firm bid price to buy by any broker or dealer. Please call your dealer for real-time pricing or information regarding their fees or commissions.

Structured Settlements

Public Investments

Managing your account

Online Account Access

  • How do I register for online account access?
    To register for online account access, you must complete the self-enrollment process. First, you will need to access our secure online account portal. At the login screen, click on the “Register” link. Please enter the last 4 digits of your SSN, date of birth, and email address of record, then click “Continue”.  After the information has been submitted, an email containing a registration code will be sent to the email address associated with your user profile. Enter the registration code provided to continue. Next, you will be directed to the “Register” screen to complete the self-enrollment process. Please enter the following information:
    • UserName – Must contain 6-20 characters and include a combination of alphanumeric and underscore, hyphen, or dot characters.
    • Password – Must contain 8- 20 characters and include a combination of letters, numbers, and symbol(s).
    • Repeat Password – Re-enter the password.
    • Security Question – Select your security question.
    • Answer - Enter your answer to the security question.
    Select “Submit” to continue.  Click the link within the message box to proceed to our secure log-on page. Enter your log-on credentials to access your user profile.  At your initial log on, you will be asked to review and accept our Electronic Communication Consent Policy. Please click “Accept & Proceed” to continue. If you decline the request, you will be unable to proceed with the self-enrollment process.  To confirm your acceptance of the policy, an email will be sent to the email address of record. Once received, please click the link within the email message.  You have now registered for online account access and can access your account on any desktop, tablet, or mobile device. If at any point in the process you receive an error message or need assistance, please contact our Client Services team at 866.928.9394.
  • How do I access my account online?
    You may access your account at any time through our secure online account portal.  If you have not registered for online account access, please complete the registration process to access your account.  You may also review our Online Account User Guide for additional assistance. If you are unable to access your account after registration, please contact our Client Services team at 866.928.9394.
  • What happens if I cannot remember my password?
    Log in to your account through our secure online account portal.  Choose whether you are using a Private or Public machine. Click the “Forgot Password” link located within the Password section of the log-on page.  You are then directed to the Reset Password screen, where you will enter your Username and click “Continue” to proceed. Next, please answer your user profile security question and click “Reset Password” to proceed. After the request has been submitted, an email containing a temporary password will be sent to the email address associated with your user profile.  Return to the log-on page, select Private or Public machine, and enter your Username. Next, please copy and paste the temporary password or manually enter the temporary password and select “Log On” to continue. Follow the instructions to enter your current password and your new password and click “Save Changes” to submit your password change request.  After the change has been submitted, an email confirming the password change will be sent to the email address associated with your user profile. If you are unable to reset your online user profile password, please contact our Client Services team at 866.928.9394.
  • How do I change my password?
    Log in to your account through our secure online account portal.  Click the down arrow on the User Profile icon, located on the top-right corner of the welcome screen. Select “Go to My Profile”, then click on the “Change Password” button located at the bottom of your profile screen.  Follow the instructions to enter your current password and your new password and click “Save Changes” to submit your password change request.  After the change has been submitted, an email confirming the password change will be sent to the email address associated with your user profile. If you are unable to change your online user profile password, please contact our Client Services team at 866.928.9394.

Account Maintenance

Fees

  • Why do I pay an annual account fee to STRATA?
    STRATA assesses an annual fee as the acting custodian on the account. Our custodial duties include:
    • the recording of contributions, transfers, and rollovers to the account,
    • the accounting for your investment(s),
    • issuing quarterly statements,
    • filing the required IRS reports, and
    • facilitating your investment, distribution, and other service requests.
  • When is my annual account fee due?
    Annual fees are due at the time your account is opened and annually thereafter on the anniversary of the account opening date. You will receive an invoice from STRATA according to the communication preference you selected at the time your account was opened. You may change your communication preference with STRATA at any time by completing and submitting our Communications Preference Request form to STRATA.
  • Why do I pay an annual Storage Fee to STRATA?
    An annual storage fee is required for the safekeeping of your precious metals by the third-party depository that you designated at the time you directed STRATA to purchase your precious metals.
  • What are STRATA's service fees?
    STRATA’s account fee schedule may vary depending on the type of investments you hold and the services you require. To learn more about STRATA’s service fees, please see our IRA Fee Schedule for more information.
  • How are my annual account fees calculated?
    The annual account fees are generally based on the account type and asset holdings. Please be aware that your cash balance is considered an account asset and is included in the account value total.
  • How may I pay my annual account fees to STRATA?
    Payment may be made to STRATA by mailing a check, or you may use our secure fee payment feature to pay online by credit or debit card on our website, https://www.stratatrust.com/payfees/.

Distributions

Required Minimum Distributions

  • What is a required minimum distribution?
    A required minimum distribution (RMD) is the minimum amount that the IRS requires you to withdraw from your IRA each year, usually after you turn 72 (or 70½ if you turned 70½ on or before December 31, 2019). The exact amount will vary from year to year based on certain factors.
  • Are self-directed IRAs subject to RMDs?
    RMDs apply to Traditional, SEP and SIMPLE IRAs, whether they are self-directed or not. Roth IRAs (self-directed or otherwise) do not require RMDs until the death of the owner.
  • When should I begin taking RMDs from my self-directed IRA?
    In most cases you are required to take your first RMD by April 1 of the year following the year you turn 72 (or 70½ if you turned 70½ on or before December 31, 2019). After that, each yearly RMD must be taken by December 31. For example, if you turn 72 in 2021, you’ll need to take your first RMD by April 1, 2022, and your next RMD by December 31, 2022.
  • How is my RMD calculated?
    Your RMD is based on your account balance as of December 31 of the year that precedes the year you are taking the distribution. That number is then divided by the amount indicated in the IRS’s Uniform Lifetime Table.  Our handy RMD Calculator can help you determine your RMD.    
  • Will STRATA calculate my RMD for me?
    Yes. STRATA provides an estimated RMD calculation for the accounts you hold with us by January 31 each year. As a courtesy, we provide RMD reminders throughout the year as well. We strongly encourage our account holders to act early.
  • Will STRATA automatically distribute my RMD to me?
    Unfortunately we are unable to process any distributions without express written consent from the account holder. However, satisfying your RMD requirement can be accomplished by simply completing our IRA Distribution Request Form. Fees may be associated with your request. You may refer to our IRA Fees Page for more information.
  • What if my IRA account cash balance is insufficient to cover the RMD amount?
    If you don’t have enough cash to cover the RMD in one IRA, then your options are as follows: 1. Take the total RMD amount from a different IRA account and leave your STRATA IRA intact. 2. Liquidate assets in order to make the distribution. 3. Take the distribution in-kind.
  • How do I satisfy my RMD when my IRA investments are illiquid?
    Some IRA assets are much harder to liquidate, distributing the RMD in shares of the investment may also be complicated or not possible. Despite these issues, there is no IRS exception for illiquid assets to the RMD requirements. Consider these possible solutions: 1- Take from One Account - RMD rules allow you to aggregate your RMDs from your IRAs and take the total amount from one account. If you have one IRA that is illiquid you could simply take the RMD for that account from another IRA. Remember, there are limits here. You cannot satisfy your RMD for your IRA from a workplace plan or a Roth IRA. 2- Add a Cash Contribution - If you are eligible to inject some cash into an IRA in the current tax year your RMD is due, you may use these funds to satisfy your RMD. The SECURE Act makes this possible by allowing IRA contributions at any age, but you would need to have earned income and you would be limited to $7,000. In order to avoid last-minute mistakes and stiff IRS penalties, it is important to plan ahead. Talk to your financial advisor or tax attorney to understand how to fulfill your RMD requirements and what is best for your situation.
  • What if I have IRAs with multiple firms?
    You must calculate the RMD for each IRA account that you own. However, you may withdraw the total amount from one account or more than one account. Please keep in mind that you must take the total amount.
  • How are RMDs treated for tax purposes?
    For most IRA accounts, distributions are treated as taxable income. For Roth IRAs, distributions are generally tax-free. You should consult with your tax professional regarding any possible tax consequences.
  • What happens if I fail to take my RMD?
    If you fail to take your RMD or if you take less than the minimum amount, you may be subject to a 50% excise tax on the amount not distributed. For example, if your RMD is $3,000 and you only take out $1,500, you may be required to pay excise tax in the amount of $750 — or half of the amount that was not distributed.
  • Will I receive notification for an RMD on an inherited IRA?
    No. Custodians are not required to send RMD notifications on inherited IRAs. For more information, please see Section 3 of IRS Notice 2002-27.

Recharacterizations

Reporting - IRS Form 5498

Reporting - IRS Form 1099-R

Fair Market Value

  • For real estate FMV, can I provide a tax appraisal statement for the property?
    Unfortunately, STRATA cannot accept tax appraisal values since they are not always indicative of the actual value of a property. Tax values can vary widely from the market value, so the values from an appraisal or a broker’s price opinion provide more accurate values for our required reporting to the IRS each year. While other unregulated third-party administrators might accept tax appraisal values, STRATA is a regulated trust company and does not accept them.
  • What if I believe an investment is worthless or out of business?
    STRATA will need supporting documentation to change a value to zero. Examples of this include:
    • A third-party appraisal
    • A written explanation from the entity signed by an officer or managing member
    • Documentation from a court-appointed receiver regarding the value
    • Bankruptcy paperwork (Chapter 7 only)
    • Articles of dissolution filed with the state

Transfers Out

  • How do I request a partial transfer of my IRA account to a successor custodian?
    Transfers are initiated by the receiving custodian. Please complete the successor custodian’s transfer request form. The completed form must include clear asset delivery instructions, the account holder’s signature and a letter of acceptance signed by an authorized signer of the successor custodian firm. The form may be submitted to us via fax, email or mail. Please see our IRA Fee Schedule to determine the fees associated with this request.
  • How do I request a transfer of my entire IRA account to a successor custodian?
    Transfers are initiated by the receiving custodian. STRATA requires a copy of the successor custodian’s transfer request form. The completed form must include clear asset delivery instructions, the account holder’s signature and a letter of acceptance signed by an authorized signer of the successor custodian firm. The form may be submitted to us via fax, email or mail. Please see our IRA Fee Schedule to determine the fees associated with this request.

Account Termination

  • How do I close my account with STRATA?
    There are two options to close your account: 1. You may elect to transfer your account to a successor custodian. 2. You may take a complete distribution of your IRA account. Contact us for more information regarding account termination.

Account Security and Protection Concerns

  • Security Policy
    While the Internet is generally not a secure environment and no one can guarantee absolute security, we strive to provide our clients with a level of comfort about the security of the information they store and transmit through our website. Protecting your personal information is of vital importance to STRATA Trust. It is our goal that all information submitted, and transactions completed through this Website are confidential and secure. To read our full security policy, visit our Security Policy page.
  • Business Continuity
    We maintain a comprehensive data recovery plan, including business continuity services and daily backup of data at a secure offsite facility. Strict policies are maintained to ensure the security of our clients’ records.
  • Client Information Privacy
    As a regulated financial institution, it is our policy not to disclose, either directly or indirectly, any personal information about our clients to third parties without the prior written consent of the client, except for our legitimate business purposes and in compliance with all applicable laws and regulations. In addition, we do not provide account or personal information to outside companies that conduct independent telemarketing or direct mail marketing.
  • Professional Liability Insurance
    Through Horizon Bank, we maintain a comprehensive insurance package, including financial institution bond policy, banker’s professional liability insurance and directors and officers’ liability insurance through underwriters rated A+ (excellent) by A.M. Best.
  • Regulatory and Audit Controls
    As a subsidiary of Horizon Bank, we are regulated by the Texas Department of Banking, which conducts regular examinations of our operation. In addition, we are audited regularly by independent auditing firms for IRA compliance.
  • Uninvested Cash
    Funds received into an account are deposited into an interest-bearing account with our parent company, Horizon Bank, or other financial institutions selected by us where balances are FDIC-insured up to $250,000 per account holder. Aside from this FDIC coverage on uninvested funds, there is no protection provided for investments held in our IRA accounts unless specifically provided by the investment.

Funding A Self-Directed IRA

Direct Transfer

  • What is a Direct Transfer?
    A direct transfer is the movement of IRA funds or assets directly from one IRA custodian to another. Through a direct transfer, the IRA owner never takes possession of their retirement funds or assets. The main advantage of a direct transfer is that there is no tax liability or IRS reporting with the distribution. This is because funds are transferred from one institution to another. In most cases a direct transfer is a simpler option as it avoids having to comply with the 60 day rule and the possibility of incurring taxes and penalties.
  • How do I initiate a Direct Transfer?
    It’s easy to request a direct transfer for your IRA funds or assets.
    • If you don't already have an account with us, you’ll need to open an account and set up an IRA. Go to our Get Started section to open an IRA using our Online Account Opening feature or download the IRA account forms.
    • If you’re an existing account holder, simply download our IRA Transfer Request Form.
     
  • How long does a Direct Transfer take?
    A direct transfer usually takes about 10-14 days. This time frame may be reduced if you request overnight delivery, wire transfer of cash or make arrangements with your resigning IRA custodian to process via fax.
  • What else should I know about a Direct Transfer?
    It’s important to remember when transferring assets in-kind (other than cash), the assets must be something that STRATA Trust Company will accept and hold. If the asset(s) to be transferred is property (directly-owned) or a private equity or private debt investment, please refer to the appropriate Investment Checklist and Form for that investment type. Direct transfers of publicly traded stocks, bonds and mutual funds require a brokerage account with any clearing firm or discount brokerage.

Rollover

  • What is a Rollover?
    An IRA rollover is the movement of funds between two qualified retirement plans, such as from a 401(k) plan to an IRA, or from one IRA to another IRA. Rollovers may be subject to federal income tax unless all requirements are met (completed within 60 days and the same property is rolled over). Rollovers typically occur when you change jobs or retire and can take 2-6 weeks to complete. Rollover rules, which became effective in 2015, now limit each taxpayer to one IRA rollover during a 12-month period. Rollovers usually take place by one of these two methods: Indirect Rollover or Direct Rollover Consult your tax professional or contact us for assistance to make sure you understand and follow the rules.
  • What is the difference between a Direct and Indirect Rollover?
    A direct rollover is when you roll over from a qualified retirement plan and your plan administrator makes the rollover check payable to your IRA custodian, in which case it may be mailed either to you or to your custodian. By choosing a direct rollover, you can avoid the normal 20% federal withholding requirement for taxes. An indirect rollover is when your plan administrator makes the rollover check payable to you for deposit into your own personal account. With an indirect rollover, it is then up to you to redeposit the funds into the new IRA within the allowed 60-day period to avoid penalty. Also, an indirect rollover requires that your plan administrator withhold 20% for federal withholding taxes — and you must rollover the additional 20% withholding out of pocket. If you do not make up the difference of the withheld amount, the IRS will consider it a distribution and will tax it as income. The amount may also be subject to an additional premature penalty tax if you are under age 59½.
  • Why consider a Direct Rollover from a 401(k) or other employer-sponsored retirement plan?
    By rolling over an ex-employer’s retirement plan into a Rollover IRA, you maintain the tax-deferred status of your retirement account. Also, a Rollover IRA will allow you to consolidate all of your ex-employer’s retirement accounts into one IRA, making it easier to manage your retirement investments. A significant advantage of using a Rollover IRA versus leaving your retirement assets with an ex-employer is increased investment flexibility.   Other advantages:
    • More Control
    When the rollover process is complete, you’ll no longer be restricted by the rules and policies of your former employer's retirement plan. In addition, you can avoid potential problems seen with some retirement plans such as untimely statements, lack of account information, limited investment options and any risk of the plan getting tangled in a bankruptcy matter should the former employer encounter financial troubles.
    • Avoid Withholding and the Tax Risk
    If you request a check from your employer-sponsored retirement plan, your employer will have to withhold 20% for federal income taxes. Unless you initiate a direct rollover to an IRA or transfer into a new employer’s plan, you will need to come up with the 20% from your own pocket in order to avoid taxes and early withdrawal penalties. By requesting a direct rollover to an IRA, you can avoid the withholding and the risk of missing the 60-day deadline.
    • Keep Your Money
    By rolling over funds or assets, you will maintain the tax-deferred status of your retirement money and, best of all, you won’t have to pay taxes on your earnings until you withdraw the money. If you request a check from your employer-sponsored retirement plan, your employer will have to withhold 20% for federal income taxes.   
    • Greater Investment Diversification
    Your previous employer’s plan probably had between 10-15 mutual funds from which to choose. By completing an IRA rollover, you will increase your investment options and improve your investment flexibility. You will also maintain the tax-deferred status of your retirement money and, best of all, you won’t have to pay taxes on your earnings until you withdraw the money.
    • Accessibility
    Because you cannot take a loan out against your IRA as permitted by some 401(k) plans, penalty-free withdrawal options are available with IRAs for events such as a first-time home purchase or for certain education expenses.
    • Estate Planning
    By naming a beneficiary on your IRA, that beneficiary would be able to take payouts from the inherited IRA over his or her life expectancy, thus stretching the life of the IRA account. Many employer-sponsored retirement plans require non-spouse beneficiaries to take a one-time lump distribution.
    • An Opportunity for Roth Conversion
    The income limitation that had once prevented many individuals from converting to a Roth IRA no longer applies. Now all individuals are eligible to convert regardless of your Modified Adjusted Gross Income (MAGI). Although a Roth conversion is a taxable event, a tax professional can help you determine if the potential long-term tax advantages of converting outweigh the short-term tax consequences.
  • When should I initiate a Rollover?
    • When you retire, change jobs or separate from employment for any reason, you are entitled to receive a distribution of your 401(k), 403(b), 457 or Thrift Savings Plan retirement funds and rollover to an IRA.
    • When you receive a distribution of cash and/or assets from an existing IRA, you have 60 days to complete the rollover of the same property in order to avoid taxes and possible penalties.
  • How is a Direct Rollover from a 401(k) or other employer-sponsored plan to STRATA accomplished?
    Whether you are retiring, changing jobs or separating from employment for any other reason, leaving a job can be the perfect opportunity to reevaluate your retirement plan needs. Moving your retirement funds to a Rollover IRA can seem like a daunting task, but it is really quite simple if you follow these easy IRA rollover rules: Step 1: Contact your plan administrator to get the distribution packet and complete the paperwork by selecting a direct rollover to STRATA. Step 2: If you’re not already an account holder, you’ll need to open an IRA. Just follow the easy steps outlined in the IRA Account Kit.   Step 3: Return the completed forms in the distribution packet to your plan administrator and provide a copy to STRATA.
  • Are there any restrictions on rollovers between IRA accounts?
    The IRS limits you to only one 60-day rollover during a 12-month period when rolling from one IRA account to another IRA. In addition, the same property rule applies, which means that you must rollover the same property (cash or in-kind assets) that was distributed to you from the other IRA.
  • How long does a Rollover take from one IRA to another IRA?
    You can request a distribution from another IRA and complete the rollover of the same cash or assets, generally in less time than it takes to complete a direct transfer. However, it is a reportable event which means the resigning IRA custodian will report the distribution on an IRS Form 1099. A distribution from your IRA is usually done either in the form of a check (if you've requested a liquidation) or as an in-kind distribution (if you requested re-registration of the assets). You then have up to 60 days to reinvest the funds or re-register the assets to your Rollover IRA. If the funds or assets are not rolled over within 60 days, taxes and possible penalties would be incurred. Important Note: A 2014 court ruling has changed the IRS's position regarding how often IRA rollovers may be completed. Since 2015, only one IRA-to-IRA rollover can be completed. Please review the One-Rollover-Per-Year Rule for more on this limit.
  • How long does a Direct Rollover take?
    A direct rollover from an employer’s retirement plan generally takes 2-6 weeks, depending on how long it takes the plan administrator to process it.
  • Want to learn more information about Rollovers?
    Visit the IRS website to learn more about IRA Rollovers of employer retirement plans and IRA distributions.

Annual Contribution

  • Am I eligible to make an IRA Contribution?
    Individuals are eligible to make IRA contributions if they have earned income. Earned income includes taxable employee compensation and net earnings from self-employment, as well as certain disability payments. The two ways to get earned income is to work for someone who pays you or if you own a business or farm. To see a complete list of what does and does not qualify as earned income please visit the IRS website. There is a spousal IRA exception to the earned income rule if you are married filing jointly and have a nonworking spouse. You may allow a working spouse to make contributions on behalf of the non-working spouse. This exception applies if the working spouse has income equal to both contributions.
  • How long does it take to open a self-directed IRA and make a contribution?
    The process can take as few as 1-2 days.
  • How do I make an annual IRA contribution?
    To contribute to your IRA with STRATA, simply follow these easy steps:
    1. Make your contribution check payable to: STRATA Trust Company
    2. Write your account number and reference the year of the IRA contribution on your check
    3. Complete and include a Deposit Certification with your check. Mail your check and Deposit Coupon to:  STRATA Trust Company, PO Box 849, Austin, TX 78767         
  • How much can I contribute to an IRA for 2021 according to the contribution rules?
    If you are eligible to make an annual IRA contribution, you may contribute up to the maximum of $6,000 if under age 50 or up to $7,000 if age 50 or over. You may contribute as often as you wish during the year (monthly, quarterly, etc.) as long as you do not exceed your eligible limit, which cannot exceed the maximum of $6,000 if under age 50 or $7,000 if age 50 or over. With a Simplified Employee Pension (SEP), the annual contribution limit increases to $58,000 for 2021, enabling a quick source of funding for a self-directed SEP IRA. Plus, you also consider making an additional annual IRA contribution of $6,000 (or $7,000 if age 50+), you can quickly amass a sufficient balance to start self-directing an IRA.
  • What's the deadline for making my 2021 IRA Contribution?
    The 2021 contribution deadline is April 15, 2022 (excluding extensions). The envelope must be postmarked to STRATA (not your dealer) by April 15 (excluding extensions).
  • How do I submit my 2021 contribution funds to my STRATA IRA?
    You may send funds to your IRA by check, ACH, or wire. You will need to complete and submit the Deposit Certification form with your contribution to ensure the funds are deposited for the proper tax year.
  • When can I make my 2022 IRA contribution?
    If you are contributing to the current tax year, your contribution can be made as early as January 1.
  • How much can I contribute to an IRA for 2022 according to the contribution rules?
    If you are eligible to make an annual IRA contribution, you may contribute up to the maximum of $6,000 if under age 50 or up to $7,000 if age 50 or over. You may contribute as often as you wish during the year (monthly, quarterly, etc.) as long as you do not exceed your eligible limit, which cannot exceed the maximum of $6,000 if under age 50 or $7,000 if age 50 or over. With a Simplified Employee Pension (SEP), the annual contribution limit increased to $61,000 for 2022, enabling a quick source of funding for a self-directed SEP IRA. Plus, you may still make an additional annual IRA contribution of $6,000 (or $7,000 if age 50+), you can quickly amass a sufficient balance to start self-directing an IRA.
  • What's the deadline for making my 2022 IRA Contribution?
    The 2022 contribution deadline is April 15, 2023 (excluding extensions). The envelope must be postmarked to STRATA (not your dealer) by April 15 (excluding extensions).
  • How do I submit my 2022 contribution funds to my STRATA IRA?
    You may send funds to your IRA by check, ACH, or wire. You will need to complete and submit the Deposit Certification form with your contribution to ensure the funds are deposited for the proper tax year. If no tax year is selected, we will apply the contribution to the current tax year.

Never Miss a Communication

  • Android Whitelist Instructions
    Open an email from the sender you wish to whitelist, click their icon/picture, and then click "Add to Contacts."
  • Apple Mail Whitelist Instructions
    Apple Mail doesn’t have the option to whitelist like some other email providers do. Instead, all you can do is mark something as “Not Junk” and it will be sent to your inbox. Here’s how:
    1. Open your Mail app and go to the Mailboxes screen.
    2. Select the Junk folder.
    3. Find the email you want to whitelist and swipe left to see options.
    4. Tap the More button.
    5. Tap the Mark button.
    6. Tap the Mark as Not Junk button.
  • Gmail Whitelist Instructions

    Gmail does not provide a quick fix for whitelisting. The best way is to add STRATA as a contact in your Gmail database. Google will send any incoming emails from your contact list directly to your inbox. You can create a contact from an existing email or create a brand new contact without having an email. 

    • Create a contact from an existing email:

    1. If your email is in the Spam folder, move it into your Inbox. (You can do this by clicking the "x" next to Spam)

               

    2. Find and open the email now located in your inbox. Once the email is open, click on the contact name (STRATA Trust Company). Then click More Info.

               

    3. On the far right, you will see the contact details pop up. Click the Add Contact button.

       
    • Create a brand new contact in Gmail:  

    If you not getting any emails at all, use this method to add contacts directly to your address book.

    1. Log in to your Gmail account. Click on your profile icon, located on the far right of the screen

    2. Click Manage your Google Account

    3. Click People & Sharing

    4. Click Contacts

    5. Click Create Contact

  • Outlook Whitelist Instructions
    For Outlook 20XX and Outlook 365
    • Make sure the Home tab is selected (1), then click on the Junk inbox (2) and find the email you would like to whitelist
    • (3) Highlight the selected email (click on the email 1x to highlight without opening it fully)
     
    • Select Junk (4), then select Never Block Sender's Domain (@example.com)
  • Yahoo Whitelist Instructions
    Yahoo does not guarantee messages from desired senders won't be sent to spam, but the steps below will help. Add a Contact to Yahoo Account: 
    1. From Yahoo Mail, select the Contacts icon
    2. Select Add a new contact
    3. Enter the sender’s information, including the sender email address
    4. Select Save
    Unmark email as spam: 
     From a mobile browser
    1. Go to Yahoo Mail in your mobile device’s web browser
    2. Tap the Sidebar menu icon
    3. Tap the Spam folder
    4. Select the desired email from the sender
    5. Tap the Move icon
    6. Tap Inbox
    From a computer
    1. Go to Yahoo Mail on your computer’s web browser
    2. Select the Spam folder If you don’t see the “Spam” folder, select More below the “Sent” folder
    3. Open the desired email from the sender
    4. Select Not Spam at the top of the page and the email will return to your Inbox
  • Additional Clients Whitelist Instructions

    For more information about whitelisting additional email clients, you can refer to LifeWire's resource How to Whitelist Email Addresses.

© 2022 STRATA Trust Company. All Rights Reserved.

STRATA Trust Company (“STRATA”) performs the duties of a directed (passive) custodian, and as such does not provide due diligence to third parties regarding prospective investments, platforms, sponsors, dealers or service providers.  As a custodian, STRATA does not sponsor, endorse or sell any investment and is not affiliated with any investment sponsor, issuer or dealer.  STRATA does not provide investment, legal or tax advice. Individuals should consult with their investment, legal or tax professionals for such services.

Investment Products: Not FDIC-Insured  |  No Bank Guarantee  |  May Lose Value

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