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With Bitcoin declared as a type of asset, it is legally possible to invest in Bitcoin as part of the IRA.
In the present day situation, a retirement fund is essential to ensure that one continues to enjoy a quality life when they grow old. In order to ensure that a person continues to receive some kind of income in their post-retirement days, Governments have made allowances for various investment schemes. Individual Retirement Account (IRA) and 401(k) are two such forms of investment.
There are multiple types of IRA. the prominent ones are Traditional IRA and Roth IRA. In traditional IRA, the investor will fund the account with pre-tax income. The contribution towards the IRA is not taxed. However, the funds will be taxed at regular rates during the time of withdrawal (after the person attains the age of 59 and half years). In Roth IRA, the investment is made with tax-paid income and the gains during the IRA term is not taxable at the time of withdrawal (provided the withdrawal is made after the person attains the age of 59 and a half).
As per the IRS regulations, IRA funds can be invested in stocks and other assets through a custodian and any dividends earned out of these investments can be diverted back into the IRA. With Bitcoin declared as a type of asset, it is legally possible to invest in Bitcoin as part of the IRA. Bitcoin IRA is the first IRS approved service that allows individuals to invest in Bitcoin-based IRA.
This post was published at NewsBTC on September 21st, 2016.