IRS rules apply to all Unchained IRA transactions.
The Unchained IRA follows IRS rules and regulations like every other bank or brokerage IRA. You can view these rules directly on the IRS FAQ page. If you have a question on how these rules apply to your specific situation, consult your attorney, tax professional, or licensed financial advisor.
Below are some common transaction types and general rules:
IRA transfers from another custodian to Unchained
If you transfer retirement funds directly from one custodian to another, you typically won't pay taxes on the money transferred as long as the funds are the same tax status. For example, pre-tax IRA funds should be transferred to a Traditional IRA, and post-tax funds should be transferred to a Roth IRA.
Employer plan rollovers to Unchained
Employer plan funds can be rolled over into an Unchained IRA. You typically won't pay taxes on the money rolled over as long as the funds are the same tax status. For example, pre-tax funds should be rolled over to a Traditional IRA, and post-tax funds should be rolled over to a Roth IRA.
Traditional to Roth IRA conversions
Converting a Traditional IRA to a Roth IRA is typically a taxable event. You will owe taxes on any money in the Traditional IRA that hasn't been taxed yet. It is your responsibility to file Form 8606 with help from your tax advisor to calculate the taxable portion of that conversion.
The 60-day rule
If you take personal possession of your retirement funds before rolling them over to an eligible retirement account, you'll have 60 calendar days to roll over into a qualified account to avoid taxes and penalties. Per the IRS, this transaction can only be executed once every 365 calendar days.
Distributions
If you've reached age 59 ½ and other applicable rules are met, distributions from a Roth IRA can be withdrawn tax-free. Distributions from a Traditional IRA are subject to tax.
If you take a distribution before reaching age 59 ½, an additional 10% penalty may apply, in addition to applicable taxes.
Backdoor contributions
Backdoor IRA contributions involve a distribution (from a Traditional to a Roth IRA). It is your responsibility to file Form 8606 with help from your tax advisor to calculate the taxable portion of that distribution, which may be zero.
Trades within an IRA
If you fund your Unchained IRA cash balance with an annual contribution, rollover, or USD transfer, you must use that cash balance to buy bitcoin. You can also sell bitcoin from your vault's bitcoin balance to your IRA cash balance. These trades are typically tax-free because all assets stay within the IRA.
Note: These are general rules which assume other applicable legal and tax requirements are met. No contents of this post may be relied upon as tax, legal, or financial advice, as they have not been tailored to your specific situation and have not been reviewed by any attorney, financial advisor, or tax professional. For any questions related to your own specific situation, please consult with your own attorney, tax professional, and/or licensed financial advisor.