Crypto IRA

[Pacun]

About 18 years ago, I was suggesting my clients to open IRAs when they came to do their taxes and in instances when lowering their taxable income would make other credits bigger... in addition to the lower tax liability as a result of contributing to an IRA. 

I also suggested when Obama care required a penalty or to return premium credit but I have stopped suggesting IRAs because they earned pennies in interest. 

I have been following and watching Lark's videos and for a couple of years I have seen he promotes Crypto IRAs. https://itrust.capital/LarkDavis and those look promising to me. 

I have two questions:

1.- Have you used crypto IRAs? if not, what do you think about them? 

2.- If I suggest my clients to contribute to an IRA, am I giving financial advice?

Thank you in advance for you comments.
 

[Abby Normal]

Crypto is a pyramid scam that will come crashing down someday, and it's also very bad for the environment because of the huge amount of electricity it consumes. When summers get really hot and you have to cut back on cooling or even have a blackout, remember the strain that crypto puts on our electric grids.

And IRAs only earn pennies in interest if you have them in cash investments. Although these days, interest rates are providing better returns on safe investments. I have some CDs in my IRAs, but stocks should eventually give better returns.

[JohnH]

IRA accounts aren’t limited to low-interest instruments - never have been.
 

My tIRA and RothIRA accounts are held in IRA brokerage accounts with Fidelity and Vanguard.  I can invest them in any manner I wish.

For me, that is 50% fixed income (CDs, govt bonds, etc) and 50% equity (in the Vanguard Total Market Index ETF). And I rebalance periodically to maintain the 50-50 ratio as market conditions ebb and flow.  So don’t fall into the trap of thinking IRA’s can only be held in bank Money Market accounts or other low-paying instruments. 

And I would never suggest that someone toss their money into a crypto scheme and call it an investment.  By that’s just me …

 

[jklcpa]

1 hour ago, Pacun said:

2.- If I suggest my clients to contribute to an IRA, am I giving financial advice?

I agree with Abby Normal on the crypto investing.

As for your second question, if you are simply suggesting that the client considers an IRA and are explaining the effects it would have on their tax return, then you are not giving investment advice.

[Lee B]

The AICPA says that you shouldn't give investment advice.

They listed a number of cases where CPA's were sued and lost for giving investment advice or for recommending specific investment advisors.

I know my Professional Liability Insurance Carrier specifically excludes investment advice.