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Frequently Asked Questions
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Following are some frequently asked questions about self-directed IRAs.<\/p>\n

What is the Purpose of these FAQs<\/u><\/p>\n

The purpose of these FAQs is to educate you on your roles and responsibilities as the account owner, and the limited role of a self-directed IRA (individual retirement account) custodian as it applies to your account.\u00a0 Please read these FAQs carefully.<\/p>\n

What is a self-directed IRA?<\/u><\/p>\n

A self-directed IRA is a retirement account that enables you to exercise your own discretion to select, invest in, and hold real estate, private equity, private lending, precious metals, and other diversified assets.\u00a0 All investment decisions and directions in your self-directed IRA are made exclusively by you or a designated third party such as an Investment Advisor or Power of Attorney that you appoint.<\/p>\n

What is a self-directed IRA custodian?<\/u><\/p>\n

A self-directed IRA custodian is a custodian that Internal Revenue Code provisions require you to select to hold and administer your retirement assets until retirement age or an early distribution by you.\u00a0 Unlike registered financial advisors and broker dealers, a self-directed IRA custodian does not<\/u> <\/strong>offer its own investments, provide investment advice, legal or tax advice, promote or provide due diligence on investment sponsors or third parties or provide or any other guidance to you when making investment choices.\u00a0 Rather, a self-directed IRA custodian performs the duties of a directed custodian and takes your instruction to invest.<\/p>\n

What does a self-directed IRA custodian do?<\/u><\/p>\n

A self-directed IRA custodian acts in the limited role of a non-discretionary administrator of your retirement assets.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 A self-directed IRA custodian provides the following services for your IRA:<\/p>\n

\u00d8\u00a0 Processes and maintains an IRA agreement and forms you submit to request actions in the IRA<\/p>\n

\u00d8\u00a0 Accepts receipt of and records contributions, transfers, and rollovers from other IRAs\/retirement plans<\/p>\n

\u00d8\u00a0 Receives and acts on your instructions to remit funds from the IRA to pay for investments you have selected<\/p>\n

\u00d8\u00a0 Receives and acts on your instructions to sell, withdraw from or liquidate investments held in the IRA<\/p>\n

\u00d8\u00a0 Holds originals or copies of documents such as subscription agreements, operating agreements, offering memorandum, promissory notes, certificates, and other evidence of the IRA\u2019s ownership of investments<\/p>\n

\u00d8\u00a0 Receives and records income from the assets held in the IRA<\/p>\n

\u00d8\u00a0 Receives and acts on your instructions to distribute assets to you or to other retirement plans from the IRA<\/p>\n

\u00d8\u00a0 Provides you with statements reflecting transactions, funds, and assets held in the IRA<\/p>\n

\u00d8\u00a0 Performs tax reporting on IRS Forms 1099-R and 5498 as required by the IRS<\/p>\n

What a self-directed IRA custodian doesn\u2019t do?<\/u><\/p>\n

A self-directed IRA custodian does not<\/u><\/strong> provide the following services:<\/p>\n

v\u00a0 Provide investment, tax, estate planning, or legal advice<\/p>\n

v\u00a0 Recommend or endorse investments<\/p>\n

This means that, in acting as custodian of an investment you have selected, the self-directed IRA custodian does not recommend, endorse, or approve that type of investment<\/p>\n

v\u00a0 Recommend or endorse investment advisors or sponsors<\/p>\n

This means that, when a custodian communicates with or acts on directions from an investment advisor or sponsor selected by you, the self-directed IRA custodian is not recommending, endorsing or approving of that advisor or sponsor.\u00a0 The custodian is also not affiliated with or an agent of that advisor or sponsor.<\/p>\n

v\u00a0 Determine the fair market value of account investments<\/p>\n

This means that a valuation submitted to the self-directed IRA custodian by the investment sponsor is not a warranty or representation by the self-directed IRA custodian that the reported value is accurate<\/p>\n

v\u00a0 Perform due diligence on any investment or investment sponsor that you select<\/p>\n

v\u00a0 Determine the safety, prudence, or suitability of any investment that you select for the IRA or for yourself<\/p>\n

v\u00a0 Have an obligation to decision whether a transaction would be deemed a Prohibited Transaction as outlined in Internal Revenue Code section 4975 (26 USC \u00a7 4975).\u00a0 Custodians do have the right to reject an investment that the custodian becomes aware of which is or could be a Prohibited Transaction.\u00a0 The responsibility lies with the account owner to ensure the transaction is acceptable in an IRA.<\/p>\n

Duties of an Account Owner<\/u><\/p>\n

Self-Directed IRAs provide the account owner the opportunity to make his\/her own investment decisions and invest in a variety of asset classes.\u00a0 The follow responsibilities fall on the account owner:<\/p>\n