A Roth conversion changes your Traditional IRA funds from pre-tax status to after-tax Roth status.
Your current custodian may be able to convert to Roth tax status for you. If your custodian cannot perform a USD Roth conversion — or you prefer to do it at Unchained — follow the steps in this article.
The funds moved into the Roth IRA are taxable income in the year of the conversion. Assuming requirements are met, Roth conversions are generally not subject to the 10% early withdrawal penalty. Normally, after conversion, at least 5 years must pass from the conversion date before the funds can be withdrawn without penalty. If you're considering converting to a Roth IRA, consult your accountant, financial advisor, or other tax professional about the tax implications for your situation.
Note: There is a $100 service fee for each USD conversion. If your funds are in bitcoin, see our guide on how to complete an in-kind (BTC) Roth conversion.
What you'll need:
- Two IRA accounts: You must have both an Unchained Traditional IRA and an Unchained Roth IRA to complete the conversion.
- Your Unchained IRA account numbers: These are your Fortis IRA account numbers and can be found on the main page of your IRA accounts.
- A funded Traditional IRA cash balance.
- Vault requirement: For USD conversions, you do not need a BTC vault to complete a Roth conversion.
How to complete a USD Roth conversion
- If your Traditional IRA funds are held at another custodian, initiate a Traditional IRA-to-Traditional IRA transfer to bring the funds into your Unchained Traditional IRA account.
- Wait until your USD cash balance is available in your Unchained Traditional IRA account.
- Complete the Roth Conversion Request Form to let us know the type of conversion (USD) and the amount to convert. Our IRA team will send you a funding form via DocuSign typically within 1 business day.
- Tip: Check your spam or junk folders if you don’t see the DocuSign email.
- Electronically sign the DocuSign form.
- Fortis Bank will convert and transfer the specified USD amount from your Traditional IRA cash balance to your Roth IRA cash balance. They will deduct a $100 fee as part of the Roth conversion.
- Done! Your Roth conversion is complete. You can build a vault and use your Roth IRA cash balance to buy bitcoin.
Note: No contents of this article may be relied upon as tax, legal, or financial advice, as they have not been tailored to you 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.