Frequently Asked Questions

Frequently Asked Questions

 

What service does Vantage provide?

Vantage provides custodial and administrative services, as well as, annual tax reporting to the IRS, in connection with Self-Directed retirement accounts.  Vantage does not provide investment advice or endorse any products. Upon your written instructions, Vantage will complete transactions on behalf of your IRA.


Are you a custodial bank?

No, Mainstar Trust serves as the non-depository trust company providing custody of assets to Vantage account holders.


What’s the interest percentage received on the un-invested cash held in my IRA?

Interest is paid on the average quarterly cash balance held within your IRA at the end of each quarter at a rate of one tenth of one percent annually.


Is it legal to purchase non-traditional assets using my IRA?

Yes, the Employee Retirement Income Security Act (ERISA) of 1974 passed the responsibility of retirement saving from the employer to individuals with the creation of the Individual Retirement Account (IRA).  From the moment these individual retirement arrangements were introduced, Americans have been able to direct their retirement savings into non-traditional alternative assets.  The restrictions placed on IRA investment options have been made by traditional financial institutions since inception, not the government’s regulations.


What kinds of investments can I make with a Vantage IRA?

The IRS code, instead of distinguishing which investments are allowed, identifies which investments are not permitted under these laws. Under both ERISA and IRS Codes, there are only two types of investments excluded: life insurance contracts and collectibles such as works of art, rugs, jewelry, etc. Refer to Internal Revenue Code Section 401 (IRC § 408(a) (3)) and IRS Publication 590.


Can I invest in traditional investments (stocks, bonds, CDs, etc.) through my Vantage IRA to purchase?

No, you cannot invest directly into the stock market with your Vantage IRA.  We specialize in the custody, record keeping and administration of alternative assets held within IRAs, not publicly traded securities.  However, you could structure your Vantage IRA with an IRA LLC, otherwise known as a “Checkbook Control” IRA, and use that entity to create a LLC brokerage account at a traditional brokerage firm or bank and self-direct into stock market based options through the IRA LLC.


What is a prohibited transaction?

A prohibited transaction is any improper use of your IRA by you or any disqualified person (party related to your IRA). Internal Revenue Code Section 4975 states: An IRA cannot engage in any transaction (direct or indirect) with anybody or anything considered related to the IRA.


What is the definition of the term “self-dealing”?

Self-dealing refers to a transaction that can provide you personally (instead of your IRA) with immediate financial gain.  It is also a direct or indirect transaction between you and anybody or anything considered a related party to your IRA as defined under Internal Revenue Code Section 4975.


What options do I have to submit transaction forms?

With the exception of a few forms requiring original signatures, all transaction forms can be submitted to Vantage in the following ways:


What Vantage forms require an original signature?

The Transfer and Durable Power of Attorney forms are the only Vantage forms that require original signatures.


How will I be notified when Vantage has received the forms I have submitted?

If received prior to 2:00pm local Arizona time, you will be notified via email the same day. You will be notified the next business day for any forms received after 2:00pm local Arizona time.


How long does it take Vantage to process my check request?

Once Vantage has received all transaction documents in good order, your check request will be completed within 72 hours.  You can expect to receive an email confirmation once your request has been processed.


Does Vantage accept electronic payments (i.e. ACH) into my IRA?

Yes, please contact our office for incoming wiring instructions.


How do I get a copy of my IRA statement?

Visit Client Login to access your account statements through your client login.


How often do I receive a statement on my account?

You will receive a year-end statement annually in the mail. Upon request to our office, paper statements can be mailed on a quarterly basis.


What is Unrelated Business Income Tax (UBIT)?

UBIT is often referred to in two different forms: Unrelated Business Income Tax (UBIT) and Unrelated Debt Financed Income Tax (UDFI). UBIT applies to IRAs invested in entities that do not pay taxes and are an operating entity of a business that produces in excess of $1,000 per year in income. UDFI relates to an IRA that is debt financed provided the net gain is more than $1,000 in a year. UBIT is applied to profits made on the sale of a debt financed property. Your IRA should report and file any UBIT/UDFI tax due on IRS Form 990-T.  Please consult your tax professional for more information.


Can my IRA be sued?

Yes, your IRA may be subject to legal action. IRAs are not always exempt from creditor claims and are never exempt from federal or state taxing authorities. However, some states do not permit creditors to collect from IRAs.


Are my Vantage account fees deductible from my personal tax return (i.e. Form 1040)?

Account fees paid through the IRA cash balance cannot be deducted. Account fees paid by cash, check or credit card outside of the IRA can be deducted as investment expenses on your personal tax return.


Why did I receive a Form 1099?

A full or partial distribution, direct rollover, re-characterization, conversion or excess contribution removal was processed for your Vantage IRA during the tax year, per your direction.


When can I expect to receive my Form 1099?

Vantage will mail Form 1099 by January 31st following the end of the tax year.


Why did I receive a 5498?

You can expect to receive this form annually as it is used to provide your total IRA account balance to the IRA and will also identify any contributions or rollovers received into your Vantage IRA during the tax year.


When can I expect to receive my Form 5498?

Vantage will mail Form 5498 by May 31st following the end of the tax year.