Self-Directed IRA FAQ

COMMON ACCOUNT HOLDER QUESTIONS

How do I fund my Kingdom Trust account?

There are several options when funding an IRA at Kingdom Trust:

  • Annual contribution
  • Rollover from a qualified plan, such as a 401k, 403b or defined benefit plan
  • IRA-to-IRA rollover
  • Direct IRA-to-IRA transfer

The Kingdom Trust staff can certainly assist you in answering any specific funding questions you may have.

Once I submit funds, is the cash in my account available immediately?

Funds received via a check are posted to the account within 1-2 business days. Wires are generally posted the same day, unless they are received after 2 p.m. CST.

How do I title my investment?

Please title your investment in the following format: The Kingdom Trust Company, Custodian, FBO Client Name Account Number. It will look something like “The Kingdom Trust Company, Custodian, FBO Joe Smith Roth IRA 1234567.”

How do I add, update or change my payment information?

Easy! You can add, update or change payment information by completing our Authorization and Change Request form and emailing or faxing it back to us. The form can be found in the Account forms and fees section of this website. Any questions about the form should be directed to Client Services at Info@KingdomTrust.com or by calling 888.753.6972.

How do I add, update or change my contact information?

Easy! You can add, update or change contact information by completing our Authorization and Change Request form and emailing or faxing it back to us. The form can be found in the Account forms and fees section of this website. Any questions about the form should be directed to Client Services at Info@KingdomTrust.com or by calling 888.753.6972.

How do I transfer an asset out of my Kingdom Trust account?

Your new custodian will need to provide Kingdom Trust with their transfer documents, which can be emailed or faxed to our offices.

How do I take a distribution from my Kingdom Trust account?

We require a completed IRA Distribution Request form, which can be emailed or faxed to our offices. The form can be found in the Account forms and fees section of this website. Any questions about the form should be directed to Client Services at Info@KingdomTrust.com or by calling 888.753.6972.

How do I convert a Traditional IRA to a Roth IRA?

Simple! First, you have to open a Roth IRA account with Kingdom Trust. Then, you will need to complete a Conversion Instructions form and email or fax it back to us. The form can be found in the Account forms and fees section of this website. Any questions about the form should be directed to Client Services at Info@KingdomTrust.com or by calling 888.753.6972.

What is a Required Minimum Distribution (RMD), and when must I take it?

The IRS requires that you take a distribution from your Traditional IRA after the age of 70½. The RMD must be taken by December 31 of that particular tax year UNLESS you turn 70½ during that year—in which case you have until April 1 of the following year. Kingdom Trust recommends you speak with a tax advisor for questions that are more specific about distributions and RMD requirements.

How does Kingdom Trust calculate my RMD?

The RMD amount is calculated upon the December 31 value of the account for the respective tax year. Kingdom Trust uses the fair market value (FMV) formula provided by the IRS to make this calculation. Please note that RMD letters go out to clients in January.

 If I am 70½ or older and do not have enough cash in my Kingdom Trust account to take the RMD, what are my options?

You can liquidate assets in your account to create enough of a cash balance to take the RMD, or you can request a distribution of those assets “in-kind” up to the value required. You can also take a distribution of funds from another IRA until you meet the RMD amount.

How do I add, update or change the ADR or interested party information on my Kingdom Trust account?

You can add, update or change Account Designated Representative (ADR) and/or interested party information by completing our Authorization and Change Request form and emailing or faxing it back to us. The form can be found in the Account forms and fees section of this website. Any questions about the form should be directed to Client Services at Info@KingdomTrust.com or by calling 888.753.6972.

How do I add, update or change beneficiary information on my Kingdom Trust account?

You can add, update or change beneficiary information by completing our Beneficiary Designation and Change Request form and emailing or faxing it back to us. The form can be found in the Account forms and fees section of this website. Any questions about the form should be directed to Client Services at Info@KingdomTrust.com or by calling 888.753.6972.

When are annual fees due to Kingdom Trust?

Annual fees are due the anniversary month of the account open date.

What are your other fees?

Please see the Miscellaneous Fees section on the fee schedule for a breakdown of fees.

How do I open an Inherited IRA with Kingdom Trust?

For the most part, this process is the same as any other new account opening. Simply fill out our Standard Kit or complete the online application. One difference for an Inherited IRA is that Kingdom Trust will need a copy of the deceased’s death certificate.

Does Kingdom Trust administer Solo 401(k) accounts?

While Kingdom Trust cannot administer a Solo 4o1(k), we can hold a Solo 401(k) on our platform.

I received my year-end valuation letter from Kingdom Trust. Can I email the completed valuation to you instead of mailing it in?

Yes, an email with the values will be acceptable. Email the valuation to Help@KingdomTrust.com.

Does an IRA LLC operating agreement have to be prepared by an attorney? Can a CPA prepare the operating agreement?

Because an operating agreement is a legal document, most jurisdictions consider the preparation of such a legal document by someone other than an attorney as the unauthorized practice of law. We highly recommend you have it prepared by an attorney.

Does Kingdom Trust require a special advisor clause in the operating agreement of an IRA LLC?

Kingdom Trust does not require one, but one should be added if it is necessary to the operation of the IRA LLC.

Can fair market value (FMV) be the value on my K-1? I do not have a fair market valuation/analysis performed annually, so the closest I can get is via the capital account information on the K-1.

The FMV is not the same as the value you see on your K-1. We do not require a full company appraisal or company evaluation to calculate your FMV. However, Kingdom Trust needs you to provide us with some fair market valuation to the best of your ability on an annual basis.

How do I transfer an existing note?

The transfer of a note is like any other transfer of assets between custodians. It will consist of a transfer form and should include an assignment of the note from Custodian A, Custodian, FBO Client’s Name to The Kingdom Trust Company, Custodian, FBO Client’s Name.

Can I open a Self-Directed IRA account, contribute for the current year, and also contribute for the previous year?

Yes. You have until April 15 of the current year to contribute on behalf of the previous year and it will not count against the current year’s contribution limits.

I own a Private Equity IRA and the company has now gone public. How do I go about selling my shares?

This type of stock typically has certain restrictions placed upon it. Those should be outlined in the documentation provided to you when you purchased the private stock. The company where you purchased it will need to outline the sale process for you.

Who is Kingdom Trust?

Kingdom Trust is an independent qualified custodian, regulated by the South Dakota Division of Banking. We specialize in unique and innovative custody solutions for individual investors like you. Every Individual Retirement Account (IRA) holder must use a bank or trust company like Kingdom Trust to custody his or her account. Learn more about our company by visiting About Kingdom Trust now.

What is a custodian?

Unlike IRA administrators or facilitators, custodians like Kingdom Trust hold an actual bank or trust charter. Kingdom Trust maintains strict policies, procedures, controls and disclosures to meet the highest of custody standards for our clients.

What types of investments does Kingdom Trust allow inside a Self-Directed IRA?

Unlike regional custodians or those limited to specific investment types, Kingdom Trust’s service area and investment options are nearly unlimited. The Internal Revenue Service only prohibits investments in life insurance, collectibles and S corporations. All other alternative investments are acceptable as long as they are structured properly and do not include a related party.

We service clients in all 50 states and in several foreign countries and custody over $12 billion in assets for over 100,000 clients. So whoever you are, wherever you are located and whatever you are interested in, we have the experience and knowledge to assist you. Call 888.753.6972 to speak to one of our IRA Specialists today!

Why do Self-Directed IRA holders need a custodian and/or administrator?

Per Internal Revenue Code (IRC) Title 26 Sec. 408, every Self-Directed IRA holder must have a federally approved custodian or administrator like Kingdom Trust. Every IRA has to have a custodian.

What is Kingdom Trust’s role as a custodian?

Kingdom Trust is chiefly responsible for the safekeeping and administration of your account assets and for the reporting of all activity within the account to you and to the IRS.

Can Kingdom Trust give me investment advice?

Absolutely not! We are a Self-Directed IRA custodian and a non-fiduciary trust company. We are prohibited by law from providing investment advice and from selling investments of any kind. Nor do we offer any type of tax or legal advice. We are a neutral third party to any type of investment decision or opportunity.

It is important to note that Kingdom Trust is a non-fiduciary trust company and we strongly recommend you make any investment decisions with the help of a financial team that includes, but may not be limited to, an accountant, a lawyer, a financial planner and any other professional who specializes in the type of asset in which you are considering investing.

Is my uninvested cash FDIC insured?

The cash held by Kingdom Trust, for your benefit, is in financial institutions covered by the FDIC. FDIC insurance covers up to $250,000 per account and applies to cash deposits only. FDIC insurance does not insure your investment(s).

Is my cash held in a safe and reputable financial institution?

Kingdom Trust policies provide that all uninvested cash be deposited daily into an interest bearing, FDIC-insured, demand account at a bank(s) of our choosing. The interest earned on an account is paid to you on a monthly basis. We only use depository banks with a Bauer Financial rating of 3.0 or higher. The ratings of the banks we use are continuously monitored and reviewed by our Executive Team on a quarterly basis.

Is Kingdom Trust regulated and by whom?

The South Dakota Division of Banking regulates Kingdom Trust. We operate as a trust company under authority granted by the state of South Dakota. We meet all capital requirements and comply with all state statutes and regulations.

Does Kingdom Trust have adequate insurance coverage?

Pursuant to South Dakota law, Kingdom Trust maintains a $1 million Errors and Omissions insurance policy and a $1 million fidelity bond. We also maintain general liability, property insurance and a Worker’s Compensation insurance policy for our employees.

How are assets protected in the event Kingdom Trust closes?

It is important to note that Kingdom Trust acts only as a custodian for the assets held inside a Self-Directed IRA. Your investments are not the property of Kingdom Trust and are not physically held in a corporate facility. In the event that Kingdom Trust closes, your assets would be transferred to another federally approved custodian for the benefit of the account holder.

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GENERAL FAQ

What is a Self-Directed Individual Retirement Account?

A Self-Directed IRA is a retirement account in which you are not limited to stock market based investment choices. With a truly Self-Directed IRA, the list of investment options is almost limitless. Once you find an investment to your liking, Kingdom Trust will help you take the steps necessary to acquire it with your Self-Directed IRA.

You may invest in alternative assets like real estate, private companies, promissory notes, precious metals, timber rights, green energy and much, much more. As a Self-Directed IRA investor, you have considerably more control over your retirement portfolio than those who deal only in exchange-traded investments.

Why have I not heard of this before?

The Self-Directed IRA has been around since the creation of the Individual Retirement Account (IRA) in 1974. They are essentially one and the same. When most people think of an IRA, however, they probably think of what banks, brokers and financial advisors typically have to offer. These vendors usually have a portfolio of stocks, bonds and mutual fund investments from which you may pick, and their salespeople are trained and incentivized to sell those specific investment products to you.

What if my financial advisor has never heard of a Self-Directed IRA?

This is unfortunately more common than you would think. Kingdom Trust works with advisors to help educate them on the benefits and the structure of a truly Self-Directed IRA.

Feel free to have your advisor contact Kingdom Trust at 888.753.6972 so that we can educate him or her on the benefits of a Self-Directed IRA.

What types of Individual Retirement Accounts are there?

There are four basic types of Individual Retirement Accounts:

Kingdom Trust can hold each of these types of accounts, as well as Solo 401(k) accounts. Please note that we do not administer Solo 401(k) accounts.

How do I know which IRA is best for me?

You should discuss your particular situation with a tax or accounting professional prior to making a choice.

Do I qualify for a Self-Directed IRA?

To qualify, you must have earned income in the United States. If you have an old 401(k), a brokerage firm IRA or a defined benefit plan, then you can move those funds into a Self-Directed IRA with Kingdom Trust. If you do not currently have an IRA or other retirement plan, you can make a contribution to open an account with Kingdom Trust today.

How do I fund my Self-Directed IRA?

You fund your Self-Directed IRA by contributing, transferring existing cash or assets from another IRA, or executing a rollover from a defined benefit plan.

What is a prohibited transaction in a Self-Directed IRA?

Download our free report clarifying prohibited transactions, including an explanation on just who a disqualified person is. You can also view the IRS webpage that discusses prohibited transactions here.

What are some prohibited investments in a Self-Directed IRA?

According to the IRS, investments that cannot be held by any type of Individual Retirement Account include

  • Life insurance policies
  • Collectibles (including works of art, gems, rugs, antiques, stamps and alcoholic beverages)
  • Certain metals and coins (see IRC 408[m][3] for some exceptions)
  • Stock in an S corporation

What other rules and regulations do I need to know?

We strongly encourage you to consult tax, legal and accounting professionals when considering any kind of investment. Every investor should know as much as he or she can about disqualified persons and prohibited transactions, including UBIT and UDFI.

How do I know my personal information is safe with Kingdom Trust?

Our technology providers are vetted and audited using the highest of security standards including SSAE 16 certifications, PCI-DSS compliant servers, and other enhanced features for data center, website and network security. Kingdom Trust and its technology providers continue to evaluate new security products to ensure we are protecting your information now and in the future.

How do I get started?

You can start by scheduling a consultation with one of our Client Service Representatives today. Our qualified staff will answer any questions you may have and walk you through the account opening and transfer processes. Our team is second-to-none and can be reached at 888.753.6972 or Info@KingdomTrust.com. If you prefer, you can fill out the online account opening form and one of our representatives will be in touch with you the next business day to assist you in completing your investment.

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ALTERNATIVE INVESTMENT FAQ

What is an alternative asset?

An alternative asset is any investment asset not publicly traded. The IRS Code governing what types of investments can be held within a non-taxable IRA account does not specify what can be held within the account but rather what cannot be held. This means that your investment options are nearly infinite.

Some of the more common investments held in self-directed accounts are

  • Real estate (commercial and residential property, tax liens, rental property, etc.)
  • Precious metals (such as gold and silver bullion, American Eagle coins and platinum bars)
  • Private companies (including LLCs, limited partnerships and C corporations)
  • Private lending (such as notes secured by deeds of trust, unsecured notes and mortgages)
  • Single-Member LLCs
  • Private REITS and funds
  • Crowdfunding

Some less common investments held in a Self-Directed IRA include

  • Timber rights
  • Cattle
  • Equipment leases
  • Virtually anything else!

Are the investment possibilities truly endless?

The alternative assets we have mentioned here and elsewhere on our site are the most common but are by no means all of the investment possibilities available. If you have questions about a potential investment, simply give us a call at 888.753.6972 to discuss. While we are unable to give investment advice, we can let you know if a specific investment type is allowed to be held in a Self-Directed IRA. It is important to have a thorough understanding of the alternative investment in which you are considering investing.

How do I invest in an alternative asset?

The first step is to open a Kingdom Trust Self-Directed IRA and complete the funding of the account, via a contribution, a rollover or transfer of funds from an existing IRA. From there, you complete an Investment Direction Kit (click on “Make an Investment” on the Manage My Account page) instructing Kingdom Trust of the investment you would like to make. Kingdom Trust will then complete an administrative assessment to ensure the investment can be held on our platform. The investment can be made once the assessment is complete. Please note each investment’s procedures and forms vary slightly, so you should contact us at 888.753.6972 for specific details.

Is there risk involved with alternative assets?

ALL investments, traditional or non-traditional, carry risk that can include loss of principal and/or return.

Can I still invest in traditional investments?

Certainly. That’s the beauty of a Self-Directed IRA! While we specialize in alternative investments, you can still invest in traditional investments such as stocks, bonds, mutual funds and certificates of deposit with Kingdom Trust.

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PRECIOUS METALS FAQ

How do I find a precious metals dealer?

Kingdom Trust does not recommend or endorse any precious metals dealer, so you must perform the necessary due diligence. When searching for broker/dealers, you will want to review their payment terms, shipment and delivery costs, broker fees, return policies, industry association memberships and which mint the dealer uses.

How are precious metals valued?

Precious metals are traded on multiple world markets and have a continuously changing fair market value, which does not include dealer markups or commissions.

Kingdom Trust receives its price updates from BullionValues.org. The market values listed often vary from prices achieved in actual transactions, and their accuracy cannot be guaranteed. No dealer markup, markdown or commission is factored in to these values, which means that your final market price may be different.

Please consult with your broker-dealer for more details or if you have further questions about valuations.

What precious metals depositories does Kingdom Trust currently work with?

We currently have relationships with Brinks Global ServicesDelaware Depository, First State DepositoryIDS Delaware and IDS Canada.

How do I know my precious metals are safely stored away?

Kingdom Trust uses well-established, nationally and internationally known storage facilities with excellent reputations in our industry. The storage facilities we use are regularly requested from our Self-Directed IRA clients.

Can I add gold or silver coins I already own to my Self-Directed IRA?

No, your IRA cannot purchase precious metals you personally own. Keep in mind that you can make in-kind transfers of precious metals from one IRA custodian to another.

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Single-Member LLC FAQS

Does Kingdom Trust offer Single-Member LLCs?

Kingdom Trust offers a Self-Directed IRA through which our account holders can invest in a single-member LLC gaining “checkbook control.”  The account holder is responsible for the creation of the single-member LLC and its supporting documentation and for finding a manager to manage the IRA LLC.

Has the IRS ever publicly commented on whether Single-Member LLCs are acceptable?

The IRS has not stated that IRA-owned single-member LLCs are acceptable or not acceptable. They have made it clear to their examiners that those structures are ripe for abuse and do keep a close watch over them.

Structured correctly, though, the Single-Member LLC can be a viable investment vehicle for a Self-Directed IRA.

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CROWDFUNDING FAQS

What is crowdfunding?

Crowdfunding is the use of small amounts of capital from a large group of individuals to finance a new business venture, oftentimes online via websites called crowdfunding portals or platforms. The intent is to increase the potential pool of investors beyond the traditional circle of venture capitalists, business owners and their relatives.

What is peer-to-peer lending?

Peer-to-peer (P2P) lending (also called marketplace lending) is the common term for debt-based crowdfunding, which is an investment into a business or project where the offering is a set return on investment over a predetermined timeframe.

What is equity crowdfunding?

Equity crowdfunding is an investment into a business where the offering is an ownership stake in the business in exchange for the investment capital.

What is a crowdfunding portal?

A crowdfunding portal, or crowdfunding platform, is a website where prospective issuers go to match up with interested investors and, likewise, where those investors go to see details of investment opportunities.

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