Frequently Asked Questions
Answers for self-directed IRA investors.
Clear, plain-English answers to the questions most often asked by current and prospective Preferred Trust Company Account Owners — from opening an account to directing investments and taking distributions.
Getting Started
Opening an account.
What is a self-directed IRA?
A self-directed IRA is an individual retirement account that allows you to invest in a broader range of IRS-allowed assets beyond publicly traded stocks, bonds, and mutual funds — including trust deeds, promissory notes, private placements, precious metals, crowdfunding investments, and more. The IRA Account Owner directs all investment activity; Preferred Trust Company serves as the passive custodian and administrator.
What types of accounts can I open with Preferred Trust?
We administer Traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, Inherited IRA (Traditional and Roth), and Solo 401(k) accounts. Each account type carries its own contribution limits, tax treatment, and distribution rules.
How long does it take to open an account?
Most accounts are established within one business day of receiving a completed application. Funding the account by transfer or rollover typically takes an additional 5–15 business days, depending on the releasing custodian.
Is there a minimum to open or maintain an account?
There is no minimum opening balance, but every IRA must maintain a $500 minimum cash balance to cover applicable fees and expenses.
Funding & Transfers
Funding your IRA.
How do I fund my new IRA?
Accounts may be funded by (1) an annual contribution, (2) a transfer from another IRA, (3) a rollover from a qualified employer plan such as a 401(k) or 403(b), or (4) a conversion from a Traditional IRA to a Roth IRA. Each method has its own paperwork and tax considerations.
What's the difference between a transfer and a rollover?
A transfer moves funds directly between two IRAs of the same type (custodian to custodian) and is not a reportable event. A rollover moves funds from an employer-sponsored plan to an IRA, or from an IRA to an employer plan, and is reported to the IRS even when no tax is due.
How long do transfers take?
Transfers typically complete within 5–15 business days after the releasing custodian receives the transfer request. Timelines vary depending on the releasing institution’s processing requirements.
What are the annual contribution limits?
Contribution limits are set by the IRS and adjusted periodically. Refer to the current IRS Publication 590-A or contact our team for the limits that apply to your account type, age, and tax year.
Investments
Directing investments.
What can I invest in with my self-directed IRA?
IRS-allowed alternative investments include trust deeds and mortgages, promissory notes, real estate, private placements (LLCs, LPs, C-Corps), precious metals, digital currency, crowdfunding offerings, and other non-publicly-traded assets. Life insurance and collectibles are prohibited by the IRS.
Who selects my investments?
You do. Preferred Trust Company is a passive custodian — we do not recommend, evaluate, or endorse any investment. You are responsible for performing your own due diligence or working with a qualified financial, legal, or tax professional.
What are prohibited transactions?
The IRS prohibits transactions between your IRA and disqualified persons (yourself, your spouse, lineal ascendants/descendants, and entities they control). Common examples include self-dealing, personal use of IRA-owned assets, and providing services to the IRA. Engaging in a prohibited transaction can disqualify the entire IRA.
How do I direct an investment?
Submit the appropriate investment authorization form along with the supporting investment documentation. Our team will review for administrative completeness, fund the investment per your instructions, and title the asset in the name of your IRA.
Account Management
Managing your account.
How do I access my account?
Account Owners receive 24/7 access to the secure Client Portal, where you can view balances, holdings, statements, tax forms, and submit service requests.
What statements and tax forms will I receive?
Annual account statements are posted to the Client Portal. Form 5498 (IRA contribution information) is issued annually by January 31, and Form 1099-R (distributions) is issued by January 31 of the following year.
How are fees paid?
Fees may be paid by check, credit card, ACH, or deducted directly from the cash held in your IRA. A current Fee Schedule is published on this site.
Can I take a distribution?
Yes. Distributions may be requested at any time and are processed via ACH at no charge. Distributions taken before age 59½ may be subject to a 10% IRS early withdrawal penalty in addition to ordinary income tax. Consult a tax professional regarding your specific situation. We provide RMD calculations annually on Form 5498.
What are Required Minimum Distributions (RMDs)?
Traditional, SEP, SIMPLE, and Inherited IRAs are subject to Required Minimum Distributions beginning at the age specified by current IRS rules. Roth IRA owners are not required to take RMDs during their lifetime. We provide RMD calculations annually on Form 5498.
About Preferred Trust
About the company.
Is Preferred Trust Company regulated?
Yes. Preferred Trust Company, LLC is a Nevada-chartered, non-depository trust company regulated by the Nevada Financial Institutions Division.
Does Preferred Trust provide investment advice?
No. Preferred Trust Company is a passive custodian and does not provide investment, legal, or tax advice. We do not endorse, recommend, or evaluate any investment offering, sponsor, or promoter.
How do I contact Preferred Trust?
Call (702) 990-7892 during business hours or email our client services team.
Detailed contact information is available on our Contact page.
Client Service Team Hours
Monday – Thursday
7:30 AM – 4:30 PM PST
Friday
7:30 AM – 4:00 PM PST
Still have questions?
Speak with a client services specialist.
Our team is happy to walk you through account types, funding options, allowable investments, and applicable fees — before you open an account.