Frequently Asked Questions | Investor Choice IRAs

Frequently Asked Questions

Our Investor Choice IRA® FAQs have been grouped into main topical areas. If you cannot find the answer to your question, please email or give us a call so we can assist you.

What is an Investor Choice IRA?

Most IRA Custodians restrict your investment options to assets such as stocks, bonds, mutual funds, or bank certificates of deposit. An Investor Choice IRA is a self-directed IRA that is not limited to these options.

What are Polycomp's Investor Choice IRA fees?

Our current fee schedule can be found by clicking below. Please contact one of our Investor Choice IRA experts should you have additional questions regarding our fees.

Investor Choice IRA Fee Schedule

What types of assets may I hold in my Investor Choice IRA?

Provident Trust Group, LLC will hold unsecured notes, secured notes, real property, limited partnership (LP) interests, limited liability company (LLC) interests, notes to LPs and/or LLCs, private placements, precious metals, etc.

Are there any assets I cannot hold in my Investor Choice IRA?

You cannot hold sub-chapter S-Corporation stock, collectibles, or life insurance.

Where can I find guidelines or requirements on a specific asset?

Are any transactions prohibited?

Yes. Generally, you may not sell, exchange, or lease property to or from the IRA. You cannot benefit directly or indirectly from any asset held by the IRA. If we feel a transaction could be prohibited, as defined in Section 4975 of the Internal Revenue Code, we will suggest you review your transaction with an ERISA attorney who specializes in retirement law. Referrals are available by clicking here.

Prohibited Transactions Fact Sheet

What are the roles of Provident Trust Group, LLC and Polycomp Administrative Services?

Polycomp Administrative Services processes the transactions, produces quarterly statements, prepares annual IRS reports, and stays current with IRS regulations affecting IRAs. Provident Trust Group holds the assets as the legal owner for the benefit of the IRA Owner. Neither Provident Trust Group nor Polycomp Administrative Services sell investment products or give investment advice.

Is there a minimum cash balance I must maintain in a Polycomp Investor Choice IRA?

Yes. All IRA Owners are required to maintain a minimum balance of $500 in the IRA cash account. If the cash account is below the required minimum balance on the last day of any month, your IRA is charged a low-balance fee for that month (see current fee schedule).

Fees are deducted from the cash account. The IRA must maintain sufficient cash reserves to meet minimum balance requirements and cover fees. If your IRA holds assets that do not generate regular income, additional cash will be needed to cover current and ongoing fees. We can help you determine the appropriate cash reserve needed before funding your IRA.

How does Polycomp Administrative Services collect administration and transaction fees?

Administration fees, as well as transaction fees and any other expenses incurred, are automatically deducted from your IRA. This allows us to keep administration fees competitive by eliminating invoicing and the need to manage receivables. Administration fees are deducted on the first day of each quarter. Transaction fees and any other expenses are deducted the date they are incurred.

Provident Trust Group, LLC's compensation will include a portion of the interest earned on unallocated cash balances. The portion of earned interest that is retained by Provident is determined each month by the per annum interest rate in effect. Interest earned on rates below 4% will be allocated between Provident and IRA Owners at the discretion of Provident. Provident retains discretionary authority with regard to the allocation of interest, but in no event will Provident's share exceed 4% per annum.

Once funds are available in my Investor Choice IRA, how do I purchase an asset?

A Direction Letter is required to process a transaction in your IRA. Upon direction from you, we will process your request, mail and/or wire the funds, and/or sign paperwork on your behalf. Prior to processing the Direction Letter, we review drafts of documents (note, trust deed, subscription agreement, etc.) to ensure correct vesting. Neither Provident Trust Group, LLC nor Polycomp Administrative Services determine the appropriateness or risk of the investment. These drafts may be emailed to Your investment will be funded within 2 business days of receipt of the required documents if the cash required is available in your IRA.

The word “vesting” refers to the title/registration of the investment held under the self-directed IRA plan. Proper title/registration is: Provident Trust Group FBO IRA Owner’s Name IRA (or Roth IRA) #” and must bear the Trust Identification Number (TIN) of Provident Trust Group, LLC.

What are the Fair Market Value (FMV) Requirements?

Polycomp Administrative Services requests the December 31st fair market value (FMV) of all assets held in your IRA annually and reports the December 31st FMV of your IRA to the IRS on Form 5498 each May. It is the IRA Owner's responsibility to independently verify the valuation accuracy and legitimacy of all assets in the account. If the IRA Owner does not provide an updated FMV* by May 1st of each year, the last reported value shown on the quarterly statement will be used for 5498 reporting.

An updated FMV must be provided prior to calculating a required minimum distribution and at the time of any reportable distribution, regardless of the age of the IRA owner. All asset valuations must be less than one month old at the time of distribution in kind is processed.

*The fair market value provided must be determined by a third party who is knowledgeable and trained to assess the value of the specific asset.

Fair Market Value (FMV) Requirements

I currently have a self-directed IRA at another custodian. How do I move the assets into a Investor Choice IRA?

1) You can liquidate assets prior to requesting a transfer and transfer cash, or you can transfer assets “in kind”. The IRS allows you unlimited transfers of assets from one custodial IRA to another custodial IRA. When transferring IRAs the receiving firm initiates the transfer paperwork.

2) You can request a distribution from the current custodian and roll the funds over to an Investor Choice IRA. You must rollover cash and/or assets within 60 days from the date you received the distribution. This transaction is reportable to the IRS and limited to once in a 12-month period.

May I open an IRA, Roth IRA, or SEP IRA with a contribution?

Yes! To open an IRA, Roth IRA or SEP IRA with a contribution you would make your check payable to: Provident Trust Group FBO (IRA Owner's Name) (IRA, Roth IRA, or SEP IRA) and include the check with the paperwork to open your account. To ensure accurate tax reporting, please reference the tax year of the contribution on your check, i.e., “YYYY Contribution".

My employment has terminated and I have assets in a qualified plan. How do I move these assets into an Investor Choice IRA?

Ask your former employer to send you the paperwork required to directly roll over your assets into an Investor Choice IRA.

I took a total or partial distribution from my IRA held at another custodian. How do I move some or all of this distribution into an Investor Choice IRA?

You may establish the account with a 60-day Rollover to a Traditional IRA. You must rollover cash and/or assets within 60 days from the date you received the distribution. The IRS allows one rollover per IRA Owner within a twelve month period regardless of how many IRAs or types of IRAs you may hold.

I currently have an IRA at another custodian. How do I convert some or all of my IRA assets directly into an Investor Choice Roth IRA?

1) You may liquidate and convert cash or you may convert assets “in kind” as a Direct Conversion from a Traditional IRA to a Roth IRA. A conversion is taxable in the year the distribution is taken from the Traditional IRA. We advise you to review the tax consequences with your tax professional.

2) If you have already taken the distribution of cash or assets, you may indirectly convert cash or assets “in kind” as an Indirect Conversion from a Traditional IRA to a Roth IRA. You must convert the assets distributed from the Traditional IRA within 60 calendar days of receipt. A conversion is taxable in the year the distribution is taken from the Traditional IRA. We advise you to review the tax consequences with your tax professional.

Can I take distributions, including a Required Minimum Distribution (RMD), from my Investor Choice IRA?

Yes! You may set up periodic distributions to be taken monthly, quarterly, or as often as you wish. Our periodic distributions are processed around the 25th of the month for receipt by the 1st of the month. Polycomp Administrative Services can also calculate your RMD upon request for a fee.

Can Polycomp Administrative Services administer my SEP plan?

Yes! However, this service is outside the scope of our self-directed IRA administration. Polycomp’s IRA department administers the employee’s self-directed IRA, which is funded by the employer’s SEP plan. If you are establishing a SEP plan, please consult with your tax or financial advisor. If you would like our assistance in administering your SEP plan (determining eligibility, calculating contribution amounts, etc.) our pension consultants would be happy to provide this service per your request. Please let us know if you would like a copy of our Fee Schedule for Administering Qualified Retirement Plans.