It is becoming increasingly popular today to have an IRA just for bitcoin.

If you create a Self-Directed IRA, you can hold almost anything you want within it, if you can find a custodian and trustee willing to facilitate it. This isn’t overly difficult to do since many new companies are jumping at the opportunity to facilitate bitcoin and cryptocurrency IRAs. Examples of assets that can be held within a self-directed IRA include real estate, cryptocurrencies, precious metals, intellectual property, private businesses, hedge funds, private equity, tax lien certificates, livestock, and more.

At the time of this writing, politician Ron Paul is appearing in television commercials for coinIRA.com, a service that will help you create an IRA for bitcoins. You can establish a tax-deductible IRA or a Roth IRA for these purposes. Self-directed IRAs require that you use approved models or guidance for the IRA, so it is not as if you can do absolutely whatever you want with them. They do have a lot of flexibility, however, and it will open up a lot of options that you may not have known existed. As long as you go along with whatever guidelines you are given by the custodian company that helps you establish the IRA, you should be in the clear with the IRS. There are good reasons to create a Bitcoin IRA if you believe in the concept and believe it will do well in the long term.

Considering that a Roth IRA uses after-tax money and that taxes are never due on the gains, holding assets within it that have demonstrated enormous upside potential, such as bitcoin, is quite appealing. Additionally, you do not have to make this you only IRA, be it a Roth or Traditional, since the IRS is only concerned with the total amount that you contribute to each category of IRA each year, and, in the case of deductible IRAs, how much you should be taking in RMDs each year in your 70s and after, based on the balance of the pre-tax accounts.

The IRS did recently come under fire from the Government Accountability Office for not issuing enough guidance on the proper use of self-directed IRAs. If there is anything about your IRA that you feel flies in the face of regulations, be mindful that there is a small chance you could be the one that gets made an example of, so you should make every effort to keep things on the proverbial “up-and-up,” and consider what your contingency plans might be if it turns out you cannot continue to do what you have been doing if regulations change.