Quote from: Bostonbitcoin on January 19, 2014, 11:44:55 PM

For Bitcoin the challenges would be great as well....suppose someone put those bitcoin in MtGox through the IRA LLC....then traded.....they could easily jury rig the trades so all profitable trades were accounted to the IRA and all unprofitable ones accounted to a regular account.....then they'd have a large loss in the taxable account and the IRA would have all the (tax deffered) gains. The only way the IRS could be satisfied that this wasn't the case is to 1) receive an audit of the owners Mt Gox account and 2) audit the other related accounts of that person --- if there are transfers back and forth from Coinbase etc. it's even harder.

Make it more simple: suppose Joes IRA LLC only buys and holds and that's it..... if he bought Bitcoin for $134, $300, $800 and $900 during 2013.... what is to prevent him from claiming all purchases at $134 and ignoring the $900?

Better yet.....Steve is a brilliant free state guy.....he bought $10,000 worth of Bitcoin at $10 and he has an existing IRA LLC for his real estate business.....what's to stop him TODAY when he files his taxes on claiming those were done on behalf of his IRA

Better yet, how about someone finding someone with Bitcoin they've held for a couple years and making a dummy receipt from Jan 5, 2013 payable to the person from the LLC.

The big firms always want a way to make a buck....if they could they would for sure at least offer it.

I've never ever seen it work other than for ultra wealthy.

Mixing personal and IRA LLC funds is a giant no-no, so you must have separate accounts at the exchange.

Sure, you can lie about which trades were yours and which were the IRA LLC's, if you're not afraid of losing everything you own and spending some time in jail. If the IRS decides to audit you, your books had better be in order. If they decide that you mixed personal and IRA LLC funds, you might be so lucky as to have them just declare the entire IRA null and void, negating all your tax savings, plus tacking on some drastic penalties. Or you might do some time.

So let me add this caveat. If you feel compelled to lie on your taxes, you should probably not try to set up an IRA LLC. You might wind up in huge trouble.

So let's review. This plan is no good for people who are too lazy to do the research and paperwork, and its no good for the dishonest. And it's no good for someone who just wants to invest a few hundred dollars.

It is good for honest people who are willing to invest some time and money in order to LEGALLY avoid capital gains in the event that the bitcoin goes way up.