FAQ

Learn all the ins and outs of creating your free IRA with Gratis

An IRA is a tax-sheltered account designed to help individuals save for retirement.

IRAs come in two different tax types:

    Traditional IRA – Contributions are made with pre-tax money that may be tax-deductible. Investment earnings are not taxed. Qualified distributions taken in retirement are deemed taxable income.
    Roth IRA – Contributions are made with post-tax money. Investment earnings are not taxed. Qualified distributions taken in retirement are tax free.

Because income is not taxed as it is earned, you can grow your savings significantly over time.

A self-directed IRA is simply an IRA where you as the IRA account holder choose the investments, as opposed to having the account managed by an advisor.

All IRA plans are the same with respect to tax benefits, contributions, distributions, and inheritance

When an IRA is self-directed, that simply means you as the account holder decide what the plan will invest in.

Conventional brokerages offer self-directed IRA plans, but they are limited to investing in conventional assets like stocks, funds, & bonds that are traded on public exchanges.

A truly self-directed IRA allows a wide array of both conventional and non-traditional investments, such as private investment funds, real estate, cryptocurrency, venture capital, and more.

The main difference with a truly self-directed IRA is that the IRA custodian has the specialized capacity to process investments and perform recordkeeping for alternative assets.

A self-directed IRA provides several primary advantages:

    You can create a more truly diversified retirement savings portfolio.
    You can invest in what you know and understand, and potentially produce better outcomes as a result.
    You can be in full control. Nobody cares about your savings more than you do.

Self-directed IRAs may seem like a recent phenomenon, but they have been around since the IRA was established in 1974. Investing in alternatives to stocks, bonds, and mutual funds has always been allowed by the IRS (see IRS Publication 590). Self-directed IRAs have not received large attention because many custodians who offer IRAs (banks and brokerage firms) typically only offer traditional investments.

Anyone can have an IRA. You just have to be a US citizen or a qualifying non-citizen with a passport and other evidence of residency.

In order to contribute to an IRA you must have earned income.

You can establish an IRA and rollover funds from another IRA or employer retirement plan, even if you may not currently be eligible to make new IRA contributions.

The Free Gratis IRA is a game-changer.

The Gratis IRA is a truly self-directed IRA offering checkbook control. You can invest in anything the IRS rules allow for simply by writing a check (or issuing a wire). You can act immediately, without the paperwork, processing queues, and high fees normally associated with self-directed IRA plans.

You can grow your IRA more effectively when investment gains are not being eaten away by fees.

Yes. The Gratis IRA is a free service.

There is no cost for the account setup or the annual administrative services provided by our partner IRA custodian.

Similar “checkbook control IRA” plans commonly cost as much as $1,700 to setup and between $150 – $500 per year to maintain.

At Gratis Financial, we believe that everyone should be able to have direct control over how their IRA is invested, without having to pay high fees that eat into returns and reduce the lifetime savings value of the account.

By leveraging technology to streamline plan setup and administration and through effective partnerships, we are able to offer the Gratis IRA program for free.

Keep in mind, while the IRA itself is free, there may be some minor expenses involved in your use of the program. Inbound and outbound wires on the trust checking account, taking a distribution from your IRA, and performing a Roth IRA conversion are examples of paid transactions.

The Gratis IRA Trust is much more than just “a retirement account”.

The power of the program comes from a special two-layered structure:

    An IRA account held by our partner custodian
    A specially formed trust that is owned by the IRA and controlled by you

The concept is not all that different than having a conventional IRA at a brokerage invested in a single fund.

What make the Gratis IRA special is that you get to be the “fund manager” and directly control how your IRA is invested – into any IRS allowed asset.

Yes. The Gratis IRA provides checkbook control over the account.

This framework, which has been around since the early 1990’s, allows you to directly manage IRA investments. The IRA owns a specially formed trust. You serve as trustee for the trust and can administer the trust on behalf of your IRA.

Since you have signing authority for the trust and trust checking account, you can execute contracts, funds the expenses of acquiring and maintaining investments, and receive the income produced by those investments.

There is no need for 3rd party review or processing of plan transactions.

An IRA trust is a specialized form of trust designed to provide you with “checkbook control” over your IRA.

The grantor and beneficiary of the trust is your IRA.

You act as trustee and can direct the affairs of the trust for the benefit of your IRA

An IRA Trust is an investment mechanism specifically tailored for IRA asset holdings, and should not be confused with other forms of family or estate planning trusts.

Historically, a “checkbook control” IRA has used an IRA-owned LLC format.

The IRA Trust and IRA LLC are similar in that both permit a “checkbook control” feature where the IRA holds ownership and the IRA account holder has administrative control.

For the Gratis IRA, we use the IRA Trust format for the following reasons:

    Filing Requirements: All states require filing fees to form an LLC and most states require annual filings and fees to maintain the LLC. In addition, there may be registered agent fees if the LLC is formed in a state where you do not live. Trusts are not registered with the state, and therefore do not require state formation filings or incur filing fees or ongoing renewal costs.
    Nexus Requirements: Every state has its own rules about when an LLC created in a different state is required to file as a foreign entity in that state. If your IRA LLC is registered in one state, and you want to, for example, purchase real estate in a different state, it is possible that the purchase triggers a requirement to register your IRA LLC in that state. The laws of each state and specific scenarios vary, but since trusts are not required to be registered with the states, this is not a concern for trusts.

The Trust format is simpler to operate, eliminates state reporting and fees or franchise taxes, and can invest in all states without additional filings.

During the initial rollout of the Gratis IRA we are limiting access to qualified investors. This will allow us to provide the highest quality service as we build out the program. Our goal is to make the Gratis IRA more widely available in the future.

There are three requirements to setup a Gratis IRA:

    You must be an Accredited Investor.
    You must intend to rollover a minimum of $50,000.
    The retirement funds you wish to use must be eligible for transfer or rollover.

A minimum rollover amount of $50,000 is required to establish a Gratis IRA.

A $500 minimum cash balance must be retained in the trust checking account. Accounts below this threshold will be subject to a monthly maintenance fee from our partner bank.

The Securities and Exchange Commission (SEC) limits some investments to what are deemed Accredited Investors.

By requiring accredited investor status to invest in private securities with lower disclosure requirements, the SEC hopes to ensure that investors will have the necessary sophistication to properly evaluate the risks involved.

Following are the requirements to be an accredited investor:

    An individual with annual income of $200,000 over the last two years, with an expectation of similar or higher earnings in the future.
    A jointly married couple with combined annual income of $300,000. This includes “spousal equivalents” such as same-sex partners.
    An individual or couple with a net worth of $1,000.000 or more, excluding a primary residence.
    An entity with equity owners that are accredited, such as the Gratis IRA Trust when the IRA account holder is accredited.
    Individuals with professional certifications or credentials that are recognized by the SEC. This includes an active Series 7, Series 65 or Series 82 license, or other such credentials as the SEC may add in the future.
    Individuals who are “knowledgeable employees” of a security they intend to invest into.

No. Joint IRA accounts are not allowed.

An IRA is an individual retirement arrangement.

You and your spouse can both establish separate Gratis IRA plans.

You can have a Traditional or Roth IRA whether or not you participate in another retirement plan through your employer or business.

You might not be able to deduct all of your Traditional IRA contributions if you or your spouse participates in another retirement plan at work.

Roth IRA contributions might be limited if your income exceeds a certain level.

Visit our online application.

It should only take 10-15 minutes to establish your account and start taking control of your retirement savings.

The online application to establish your Gratis IRA should take about 10-15 minutes to complete. We’ve made the process super-streamlined.

Depending on the type of funds you want to move to your Gratis IRA, it normally takes from 1-4 weeks to be setup, funded, and ready to make an investment.

Your Gratis IRA can be established as a:

    Traditional IRA
    Roth IRA
    Inherited Traditional IRA
    Inherited Roth IRA

At the current time, our custodian partner does not support employer IRA plans such as SIMPLE and SEP IRAs. If you have such a plan, you can rollover funds to a Traditional IRA as your Gratis IRA type.


A rollover is only allowed from a SIMPLE IRA if the employer has sponsored the plan for at least two years.

The Gratis IRA operates within the same funding rules as any other IRA.

Most types of existing retirement plans can be rolled over to an IRA.

IRA
Any type of IRA will be eligible to be transferred to your Gratis IRA in full or in part.

    Traditional IRA
    Rollover IRA
    Roth IRA
    SEP IRA
    SIMPLE IRA that is more than 2 years old
    Inherited IRA (Traditional or Roth)

Former Employer Retirement Plan
A qualified employer retirement plan from a previous employer will be eligible to rollover to your Gratis IRA.

    401(k)
    403(b)
    457 plans
    Keough plans
    Money purchase plans
    Profit sharing plans
    Pension plans
    Most state and federal government plans such as a TSP

Current Employer Retirement Plan
Unless you are still working with your employer beyond normal retirement age of 59 1/2, you probably cannot roll funds out of your current employer plan.

Any money you rolled into this plan from a prior plan or IRA will be eligible for rollover.

Some plans allow for an “in-service” distribution based on criteria such as years of service, a specific age, etc. It is rare, but ask your HR department or plan administrator to see if you qualify.

Yes. You can add more money to your Gratis IRA via one of several means:

    New tax-year contributions to the IRA
    A transfer from a compatible IRA
    A rollover from a compatible 401(k) or similar qualified employer plan

All new funds are deposited into the IRA account with the custodian, then invested into the Gratis IRA trust.

Yes. You can contribute to your Gratis IRA just like any other IRA.

Your contribution is made to the IRA account with the plan custodian, and then invested into the Gratis IRA Trust.

Standard rules apply to IRA contributions. Contribution amounts, the ability to deduct traditional IRA contributions, and the ability to make Roth IRA contributions vary based on your age, income, and whether you have access to an employer sponsored retirement plan.

The Gratis IRA can invest in anything the IRS rules allow for. The IRS does not have a list of approved investments. Rather, there are a few things that are prohibited as investments. Everything else is therefore allowed.

Following is a list of assets commonly available to investors with a self-directed IRA:

    Conventional assets like stocks, bonds, & mutual funds
    Private investment funds, real estate funds, debt funds, venture funds, etc.
    Real estate in many forms
    Real estate partnerships
    Trust deeds and other note or lending arrangements
    Stock of privately held companies
    Bitcoin and other digital currencies
    Specifically allowable precious metals
    Tax Liens & Deeds
    Mineral rights

With a Gratis IRA you have a wide variety of investment choices. That allows you to invest in opportunities where you may have more expertise and control.

There are two classes of items an IRA cannot invest in:

    Life insurance of any kind
    Collectibles such as artwork, jewelry, antiques, coins, stamps, rugs, alcoholic beverages, and the like

An IRA also cannot invest in shares of a subchapter S corporation, because such corporations can only accept individuals and certain specific types of trusts as shareholders.

Investing with your gratis IRA is simple because you have direct control.

When a good opportunity comes along, you can act immediately and with confidence

    The Gratis IRA Trust is the investor and takes title to the asset
    As trustee, you execute contracts and fund the purchase from your IRA Trust checking account
    Any future expenses related to an investment are paid from the IRA Trust checking account
    All income produced by an investment is returned to the trust and has the tax-sheltered treatment of the IRA

Yes, your Gratis IRA Trust can establish a brokerage trading account with a firm such as TD Ameritrade.

You can move funds between your IRA Trust checking account and such a brokerage account easily and without special reporting since both are held within the trust that is under the umbrella of the IRA.

As tax-sheltered savings tools designed to save for retirement, IRAs come with certain restrictions.

All activities must be exclusively for the benefit of the IRA. This means you cannot use the IRA to provide a current benefit for yourself such as using the assets held in the IRA personally or taking funds out of the IRA without processing a formal distribution via the IRA custodian.

Any transaction that creates a direct or indirect benefit between the IRA and a disqualified person (you, spouse, lineal family, etc.) is deemed a prohibited transaction and can have severe tax consequences.

IRS rules are outlined in IRS publication 590A & 590B, IRC Section 408, and IRC Section 4975.

A prohibited transaction occurs when there is a provision of benefit between an IRA and a disqualified person. Such transactions are often referred to as “self-dealing”.

Examples include living in or renting a house owned by your IRA, using your IRA to purchase a property you already own personally, lending to yourself, certain family members, or your own business from your IRA, comingling IRA and personal funds, etc.

When a prohibited transaction occurs, there are severe tax consequences, including the loss of tax-sheltered status for the IRA.

Prohibited transactions are documented in IRC Section 4975.

Any transaction or direct or indirect benefit between an IRA and the IRA account holder or other disqualified persons results in a prohibited transaction.
Disqualified persons include:

    The IRA account holder
    Their spouse if married
    Lineal antecedents such as parents, grandparents, etc.
    Lineal descendants such as children, grandchildren, etc.
    The spouse of a descendant
    A fiduciary or other person providing services to the plan
    Certain key employees, partners, or joint venturers of an entity sponsoring a plan or controlled by a disqualified person.

Disqualified persons are defined in IRC Section 4975.

There are no taxes associated with setting up a Gratis IRA.

The Gratis IRA is still an IRA, just with greater investment flexibility.

You can setup your IRA and rollover funds from a prior IRA or employer plan without creating a taxable event.

Yes. All IRA accounts are reported to the IRS using form 5498.

Our IRA custodian Solera National Bank performs this reporting, which includes beginning and end of year account balance and the amount of any contributions, distributions or rollovers that occur during the year.

Unrelated Business Taxable Income (UBTI) is generated when an IRA engages in a trade or business on a regular or repeated basis.

When an IRA generates UBTI the IRA will be subject to taxation reported on form 990-T and paid by the IRA.

Common examples of UBTI generating activities include:

    Repeated flipping of houses or other “dealer” activities
    New home construction for immediate sale
    Ownership in an operating business treated as a “pass through” for taxation

Passive income such as interest, dividends, royalties, rent from real property, or the sale of an asset that has been held over time does not create UBTI.

Unrelated Debt-Financed Income (UDFI) is generated when an IRA uses leverage such as mortgage financing to acquire real property.

The percentage of income associated with the non-IRA (borrowed) money is received into the IRA, but treated as taxable UDFI.

The same percentage of allowable deductions such as depreciation and interest on the note apply, and will reduce the impact of UDFI.

When an IRA generates UDFI the IRA will be subject to taxation reported on form 990-T and paid by the IRA.

Gratis Financial, LLC is a financial technology firm headquartered in Portland, Oregon.

We are committed to bringing the benefits of a self-directed IRA to all investors who have the desire to take greater control of their retirement future.

Our team includes leaders in self-directed IRAs, banking, and alternative asset investing, with decades of combined expertise in these fields.

Solera National Bank is a leader in IRA custody and banking services for self-directed IRA investing.

Headquartered in Denver, Colorado, Solera has been in business since 2007.

Solera Bank has a national charter and is regulated by the Office of the Comptroller of the Currency (OCC). Most banks are state chartered and regulated at the state level. OCC regulated banks have the highest level of scrutiny and oversight.

All accounts at Solera Bank are FDIC insured up to $250,000. Solera Bank holds FDIC Certificate 58534.

Accolades awarded to Solera include:

    A rating and member of Top 200 Healthiest Banks by Lending Tree
    5-Star rating by Bauer Financial

The Gratis IRA setup process is entirely safe.

Your funds will first move into your IRA account with our licensed IRA custodian, Solera National Bank.

The IRA is then invested into the Gratis IRA Trust and funds are moved to your Trust checking account held by Solera.

Throughout the process, your funds are FDIC insured up to $250,000.

At no point does Gratis IRA or Solera National Bank have discretionary control over the use of your IRA funds. Only you decide how funds are deployed into the investments you choose.

Cash held in your IRA custodial account or IRA Trust checking account is FDIC-insured up to $250,000.

Any other investments held by your IRA are not FDIC-insured, are not guaranteed, and may lose value.