If an IRA does so, Code Section 408(m) provides that such an acquisition is treated as a taxable IRA distribution. Thus, transfer of cryptocurrency from one IRA to another IRA by direct transfer will not cause a taxable IRA distribution of the cryptocurrency. CommentBecause IRA contributions must be made only in cash, and because cryptocurrency isn’t cash under Notice 2014-21, cryptocurrency may not be contributed to an IRA. Thus, cryptocurrency purchased and held by an IRA can be –Rolled over within 60 days of distribution to another IRA, including to a Roth IRA in a Roth IRA conversion, provided that the type of cryptocurrency rolled over is the same type distributed;Transferred by direct transfer from one IRA to another IRA of the IRA owner, under Revenue Ruling 78-406, 1978-2 C.B. 157, provided that the type of cryptocurrency rolled over is the same type as was distributed; orTransferred by direct transfer to an IRA set up and maintained for the death beneficiary of an IRA (i.e., an inherited IRA) following the death of the IRA creator.

Source: Forbes January 08, 2022 02:05 UTC