What is the process for closing my account?

Clients may choose to close their Self-Directed IRA (SDIRA) with American Estate & Trust (AET) for several reasons, including transferring to another custodian, withdrawing all funds, or performing a 60-day rollover. The process for closing an account depends on the method chosen.

Methods for Closing an Account

1. Full Transfer to Another Custodian

A client may transfer their entire account, including cash and/or assets, to another custodian. To initiate this process:

• Request Transfer Documents – Contact the successor custodian and obtain their transfer paperwork.
• Submit Transfer Request to AET – Send the completed transfer documents to AET for processing.
• Asset Handling – Assets may be transferred as-is (if the successor custodian accepts them) or liquidated before the transfer.
• Final Processing – Once all funds and/or assets are transferred, the account will be closed.

Note: Once the transfer is completed and the account is closed, clients will no longer have access to AET’s online portal. Clients should download any needed statements or investment documents before finalizing the transfer.

2. Full Withdrawal or Distribution

Clients may close their account by withdrawing all cash and assets as a distribution. This can be done as:

• A Cash Distribution – The client withdraws all funds from the account.
• An In-Kind Distribution – The client takes possession of an asset (e.g., real estate, precious metals) instead of selling it for cash.

Tax Implications: A distribution from an SDIRA may be taxable and could be subject to penalties depending on the client’s age and account type. Clients should consult a tax professional before proceeding.

Once the full withdrawal is processed, the account will be closed, and online portal access will be disabled. Clients should retrieve any necessary documents beforehand.

3. 60-Day Rollover

A 60-day rollover allows a client to withdraw funds from their IRA and deposit them into another IRA within 60 days without triggering a taxable distribution. To complete this process:

• Request a Distribution from AET – The client withdraws the funds, initiating the rollover.
• Complete the Rollover Within 60 Days – The client must deposit the full amount into a new IRA within the time frame to avoid taxes and penalties.
• Account Closure – If the entire balance is withdrawn, AET will close the account once the distribution is finalized.

Important: If the rollover is not completed within 60 days, the withdrawal may be treated as a taxable distribution. Clients should ensure all requirements are met before choosing this option.

Tax Reporting for 60-Day Rollovers

When a client performs a 60-day rollover, AET is required to issue a 1099-R at year-end, reporting the distribution from the IRA. If the funds are successfully rolled into a qualified IRA within the allotted timeframe, the successor custodian will issue a Form 5498, which offsets the 1099-R by reporting the rollover contribution.

Many clients are unaware that a 1099-R is generated even if the rollover is completed correctly, leading to confusion when they receive the tax document. If performing a 60-day rollover, clients should retain records of their deposit into the new IRA and consult a tax professional to ensure proper reporting on their tax return.

Final Considerations

Regardless of the closure method, once an account is closed, clients will no longer have access to AET’s online portal. If past account statements, investment records, or other documents are needed, they should be downloaded before the closure is finalized.

For assistance with closing your account, please contact AET Support.