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Frequently Asked Questions (FAQs)

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GETTING STARTED

  1. What is a self-directed IRA?

A self-directed Individual Retirement Account (SDIRA) only differs from other Individual Retirement Accounts (IRAs) in that the IRA owner has more control and flexibility when it comes to choosing investments. Typically, IRA investments are limited to exchange-traded assets like stocks and bonds. A custodian like PENSCO offers self-directed IRA owners expanded investment options that include alternative investments.

  1. Why would I invest in alternative investments using my IRA?

  2. What are some of the things I should consider when making a self-directed IRA investment?

  3. What is the role of my self-directed IRA custodian?

  4. Why should I choose PENSCO as my alternative asset custodian?

MANAGING YOUR ACCOUNT

OPENING AN ACCOUNT

  1. How do I open a PENSCO account?

FUNDING YOUR PENSCO ACCOUNT & TRANSFERS IN

  1. How do I fund my new PENSCO account?

  2. How do I transfer/rollover cash and/or investments into my PENSCO account?

  3. How long does it take to transfer/rollover cash and/or investments into my PENSCO account?

  4. When is the last day to make a contribution to my IRA for the 2016 tax year?

TRANSFERS OUT

  1. How do I transfer/rollover cash out of my PENSCO Trust account?

  2. How do I transfer or distribute an asset out of my IRA?

DISTRIBUTIONS

  1. How do I take a cash distribution from my account?

  2. How long does it take to receive my funds when I request a cash distribution?

  3. How do I set up a recurring cash distribution from my PENSCO account?

  4. What is a Required Minimum Distribution (RMD)?

  5. How do I satisfy my RMD?

SERVICE CHARGES

  1. What are PENSCO’s service charges?

CONVERSIONS

  1. How do I convert my Traditional IRA at PENSCO to a Roth IRA?

GENERAL ACCOUNT MAINTENANCE

  1. Where can I find my PENSCO account number?

  2. How do I add or change my banking instructions on file?

  3. Who do I contact for questions regarding my account or my statements?

ONLINE ACCOUNT ACCESS & MAINTENANCE

  1. How do I register to access my account online?

  2. How do I update my contact information?

  3. How do I change my security questions and answers?

  4. How do I change my credit or debit card information?

  5. How can I give my spouse or other interested party view-only access to my account online?

  6. I have access to my account online but still don’t see my transactions. How do I view them?

CLOSING YOUR PENSCO TRUST ACCOUNT

  1. How do I close my PENSCO account?

  2. What are the service charges associated with closing my PENSCO account?

ALTERNATIVE INVESTING

KEY FACTORS TO CONSIDER WHEN MAKING A SELF-DIRECTED IRA INVESTMENT

  1. What types of alternative assets are permitted in a self-directed IRA?

  2. What types of investments or transactions are prohibited in a self-directed IRA?

  3. How do I identify a fraudulent investment?

  4. When do I need to be concerned about UBTI or UDFI?

GENERAL ALTERNATIVE INVESTMENT QUESTIONS

  1. How do I make an investment in an alternative asset with funds from my PENSCO account?

  2. How should the name of the investor be titled on documents related to my investment?

  3. How long does it take for my investment transaction to be completed?

REAL ESTATE INVESTMENT QUESTIONS

  1. Can I buy real property with funds from my PENSCO account? How?

  2. How can I purchase a piece of property with my PENSCO account if I only have enough cash available to cover a portion of the purchase price?

  3. Can I invest in a Real Estate Investment Trust (REIT) with funds from my PENSCO account?  How?

  4. Can I invest in tax liens and tax certificates with funds from my PENSCO account? How?

NOTE INVESTMENT QUESTIONS

  1. Can I buy or invest in deeds of trust, mortgage-backed notes or secured notes using funds in my PENSCO account? How?

  2. Can I make an unsecured loan to an individual or company with funds from my PENSCO account? How?

  3. Can I make a convertible note investment with funds from my PENSCO account? How?

PRIVATE EQUITY INVESTMENT QUESTIONS

  1. Can I invest in a Limited Liability Company (LLC) with funds from my PENSCO account? How?

  2. Can I invest in a Limited Partnership (LP) with funds from my PENSCO account? How?

  3. Can I invest in Offshore Funds with funds from my PENSCO Trust account? How?

STANDARD/MARKET TRADED INVESTMENT QUESTIONS

  1. Can I buy mutual funds with my PENSCO account?

  2. Can I purchase an annuity with funds from my PENSCO account?

  3. Can I buy and sell publicly traded equities (stocks) with funds from my PENSCO account?

  4. Can I buy and sell fixed income securities with funds from my PENSCO account?

  5. Can I set up a Brokerage or Managed Account within my PENSCO account?

  6. Can I purchase a Certificate of Deposit (CD) from a third-party bank with my PENSCO account?

  7. Can I invest in Dividend Reinvestment Programs (DRIPs) with funds from my PENSCO account?

INVESTMENT MAINTENANCE

GENERAL INVESTMENT MAINTENANCE

  1. How do I sell an alternative investment that I hold in my PENSCO account?

  2. I have a question about one of my investments. Who do I contact for help?

  3. The IRS requires that my custodian report the value of my IRA to the IRS on an annual basis. How do I provide valuation information that I may have to PENSCO?

REAL ESTATE INVESTMENT MAINTENANCE

  1. I own a piece of property in my PENSCO account and I rent it to a tenant. How should my rent checks be titled and where should they be sent for deposit?

  2. How do I direct PENSCO to pay my investment property expenses from my IRA?

  3. How do expenses get paid if my real estate investment expenses are handled by a designated property manager?

  4. How much money can I transfer from my IRA into my designated property manager’s account?

  5. What kind of real estate expenses can the investment property manager pay?

  6. Is there any type of expense the investment property manager should not be paying?

  7. Can the IRA owner be an authorized signer/person on the property management checking account that is established for the individual property?

  8. Can the investment property manager authorize PENSCO to transfer funds from my PENSCO account to the property management account?

  9. Can the property management account pay the bills related to the investment property with funds that do not come from the IRA?

  10. If my IRA only owns a percentage of the real estate investment property held in my PENSCO account, does the IRA need to pay only its percentage of the expenses associated with such property?

NOTE INVESTMENT MAINTENANCE

  1. I invested in an unsecured note, convertible note or Deed of Trust with funds from my PENSCO account. Where should my monthly principal or interest payments be directed?

  2. I invested in an unsecured note with funds from my PENSCO account, but the borrower is unable or has refused to pay me back. What are my options?

  3. I invested in a Deed of Trust (or other secured note) with funds from my PENSCO account, but the borrower is unable or has refused to pay me back. What are my options?

PRIVATE EQUITY INVESTMENT MAINTENANCE

  1. I own a percentage interest in a private equity investment in my PENSCO account. Where should dividend and return of capital payments be directed?

  2. I own a percentage interest in a private equity investment in my PENSCO account. Who provides PENSCO with a value for my portion of that investment?

THE PENSCO MARKETPLACE

  1. What is The PENSCO Marketplace®?

  2. How do I participate in an equity or debt crowdfunding investment with funds from my PENSCO account?

  3. How can I locate financial and real estate professionals who can help me use my PENSCO self-directed IRA to invest in alternative assets?

  4. I own a piece of property in my PENSCO account. How can I find a property manager who can help with rent collection and general maintenance?

  5. I purchased a percentage interest in a Deed of Trust with funds from my PENSCO account. How can I find a financial professional who can service the loan?

FINANCIAL PROFESSIONALS AND INSTITUTIONS

  1. I am a capital raiser. How can PENSCO help me and my investors who want to use IRA funds to invest in my offering?

  2. Can PENSCO’s platform integrate with my Portfolio Management System?

  3. Can PENSCO advertise my fund to their clients?

  4. What is the PENSCO Pro Portal and how can I obtain access?

  5. What documents does PENSCO need to review an investment opportunity?

  6. When I use PENSCO’s Pro Portal to invite prospective investors to invest in my fund, how do they open an account with PENSCO and invest in my fund?

  7. As a capital raiser, do I need to provide valuations to PENSCO for all my IRA investors who hold my investment with PENSCO?

  8. What is The PENSCO Marketplace® and can my firm be listed?

 

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