Friday, January 24, 2020
Frequently Asked Questions - Self-Directed IRAs

frequently asked questions (self-directed iras)

Q. When are statements issued?

A. Semi-annual statements are mailed the end of January and July. Notice of Deposit to an IRA is mailed after cash contributions, transfers and rollovers are received. Online account statements are available 24/7.

Q. Why should I make a contribution if it is not tax deductible?

A. Non-deductible contributions grow tax free in a Roth IRA and tax deferred in a Traditional IRA. This tax-favored treatment usually makes even a non-deductible contribution a smart move.

Q. What forms do I need to get started?

A. The forms needed to open an IRA are generally the Simplifier, Transfer or Rollover form and the Investment Direction form.

Q. What is the difference between the cost basis and market value?

A. Cost Basis is the amount paid for the assets, including any dealer fees or commissions.

The Market Value of precious metals shown on your statement reflects estimated bid values for each asset and not a firm price gauge to buy or sell through a dealer. Additionally, these estimated values do not include dealer mark-ups, discounts, or commissions. Current price estimations for bullion and proof products can be obtained from various sources including your dealer or websites such as

The Market Value of bonds includes the principle amount for SI bonds or principle plus compound interest for CI bonds.

The Market Value of loans funds, mutual funds, stocks, foreign assets, etc. may be updated monthly, quarterly, semi-annual, or annually based on the individual asset.

Q. My statement shows a market value less than I invested.

A. The fair market value we provide is a bid price or wholesale price used for tax reporting purposes. You could reasonably expect to sell for at least this amount. GoldStar updates this value every two weeks. Any fees or commission paid to your dealer may have been included in your purchase price. Please call your dealer for real-time sale pricing and any fees or commission paid.

Q. Can I take possession of IRA assets?

A. No, all IRA assets must remain within the custody of a custodian or trustee of the IRA. Precious Metals must be stored in an IRS approved depository. You may take a distribution of assets in your IRA, which is a taxable event reported to the IRS.

Q. What tax forms can I expect to receive from GoldStar Trust Company?

A. IRS 1099R: reports taxable distributions from an IRA to the IRS and the account holder. The 1099R is mailed by January 31st each year and reports all distributions from the IRA for the prior calendar year. Box 7 "Distribution code" describes the nature of the distribution. The least restrictive code is "7"; for normal, penalty free distributions of a Traditional IRA to the qualified owner. Roth conversions are also reported on the 1099R.

IRS 1099OID: reports taxable compound interest (CI) accrued during the tax year, but not paid to the client.

IRS 1099INT: reports taxable interest paid on simple interest (SI) bonds

IRS 5498: is sent out after April 15th (tax deadline) and before May 31st. This form reports the December 31st Fair Market Value and contributions for the prior-year. The IRS Form 5498 is sent out after April 15th since contributions to an IRA can be applied (postmarked) through April 15th. IRS regulations require GoldStar to send the forms to the client and the IRS. A 5498 is informational and not required to file a tax return. Recharacterization, RMD required distributions, and rollovers are also reported on the 5498.

FDIC NOTICE: IRA and/or Bond investments represented on this website are not FDIC-insured, are not guaranteed by GoldStar Trust Company, and involve risk including possible loss of principal. If held in a GoldStar IRA or GAMMA account, the un-invested cash portion is FDIC insured up to $250,000.