An accredited investor is an individual or entity who fulfills specific income and/or wealth requirements and is subsequently allowed to purchase unregistered securities, often in the form of alternative assets. To review the codified federal regulation on Accredited Investors, you can follow the link here.
Alternative assets are non-traditional asset categories that many investors utilize to diversify their portfolio or seek alpha. Commonly designated alternative assets include real estate, cryptocurrency, peer-to-peer lending, hedge funds, venture capital, startups, collectible art, and other private offerings. You can find a list of IRA-eligible investments here.
A Checkbook LLC (also referred to as a Checkbook IRA) is a type of IRA that gives investors the ability to write checks directly from their IRAs, and is often utilized to facilitate real estate transactions and ongoing maintenance.
Individual Retirement Account (IRA)
An Individual Retirement Account (IRA) is a tax-advantaged Investment account that enables an individual’s Investments to grow tax-deferred or tax-free for the purpose of retirement. There are several types of IRAs to choose from based on your situation:
IRAs can also be created as a self-directed IRA, which enables investors to participate in a wider array of investment opportunities. Alto currently offers investors traditional IRAs, Roth IRAs, and SEP self-directed IRAs.
National banks, pension funds, and mutual funds are examples of institutional investors. Due to their size and sophistication, institutional investors are often able to negotiate preferential fees and provide access to deals that retail investors may not otherwise be able to invest into.
An invitation is Alto’s method of linking investors and issuers through Alto and facilitating the execution of investments. Once an issuer, or deal sponsor, has joined Alto and created an offering (or investment), they can invite investors to invest through a unique URL. Alternatively, investors who already have an issuer that they plan to work with can invite that issuer to Alto through the same process.
An Investment is a vehicle used to store value that is generally expected to increase in value over time in order to provide a return on investment to the purchaser. Commonly cited investments include stocks and bonds, and are offered through traditional brokerages and investment advisors. Alternative investments, or alternative assets can provide investors with additional diversification as well as superior returns.
Issuers, often synonymous with originators or deal sponsors, are responsible for creating offerings and inviting investors to participate in them. Additionally, issuers are generally responsible for collecting and uploading the deal documents necessary to execute investments.
A limit order is, similar to a market order, an order to buy or sell an asset. As opposed to buying a given asset immediately at its current market price, however, a limit order allows you to set certain price parameters for your purchasing or selling preferences such that a transaction is only initiated once those parameters are met.
For example, if you want to buy a cryptocurrency only once it falls to a certain price—or, for that matter, to sell only once a given cryptocurrency’s value reaches a certain number—you can specify those price parameters so that the limit order will be fulfilled if and when those conditions are met.
A market order is an order to buy or sell an asset at the current trading price. The trade is placed and filled immediately and cannot be canceled. For a complete understanding of a market order, it can help to see how it differs from a limit order.
Offerings can be thought of as the investments that are made available through investment platforms, partners, or individuals.
Partners are investment platforms that Alto’s investors are able to easily invest with. Alto partners with an amazing (and growing) list of investment partners that offer investors an excellent opportunity to diversify their portfolio and seek alpha.
A retail investor is an individual investor who purchases and sells stocks, bonds, and other commonly-traded assets, usually through a traditional brokerage or bank.
A Roth Individual Retirement Account (IRA) enables investors to contribute post-tax income that can be invested and will grow tax-free over the life of the account.
Self-directed IRAs are commonly offered by specialized custodians like Alto. These IRAs enable investors to invest in a wider spectrum of Investments and alternative Investments. To find out more about self-directed IRA investing, check out this article.
A solo 401(k) is a retirement plan offered to employers who do not have any full-time employees other than the business owner and/or their spouse.
The Alto platform
The Alto platform enables investors to create, open, fund, and execute Investments using a self-directed IRA on a tech-forward and easy-to-use platform. On AltoIRA.com, investors are able to create a traditional, Roth, or SEP IRA that is custodied by Alto. From there, users can invest through one of Alto’s platform partners, bring their own deal to the platform, or connect Alto to another platform to facilitate an Investment. By connecting investors to our platform partners, investors are able to seek alpha and diversify their portfolio using tax-advantaged retirement dollars.
A traditional IRA is an Individual Retirement Account that allows investors to contribute pre-tax income that can be invested and will grow tax-deferred over the life of the account until distributions are taken.
Traditional Investments are often categorized as stocks, bonds, cash, and single family residences.
Unrelated Business Income Tax (UBIT)
Unrelated Business Income Tax is the taxes paid by exempt individuals and organizations.
Unrelated Business Taxable Income (UBTI)
Unrelated Business Taxable Income is an additional tax imposed on income that is generated by tax-exempt entities engaging in taxable business activities not related to their tax exempt purposes.
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*AltoIRA provides a website and platform service for administering self-directed Individual Retirement Accounts. Empire Trust, Inc. (“Empire”), a non-depository, state-chartered trust company supervised by the Financial Institutions Divisions of the Regulation and Licensing Department of the State of New Mexico), serves as the passive, non-discretionary custodian for AltoIRA accounts pursuant to Section 408 of the Internal Revenue Code. Empire Trust delegates to AltoIRA, as administrator and agent administrative functions of the custodian with respect to AltoIRA accounts, and these functions are performed using AltoIRA’s technology.