You should refer to IRS Publication 590-A – Contributions to Individual Retirement Arrangements (IRAs) for additional information and worksheets to help you determine your modified AGI and the deductibility of your contributions.

h. Nondeductible Contributions.

• i. You can still contribute the maximum amount of your allowable contribution even if it is nondeductible. Nondeductible contributions should be reported to the IRS with your federal tax return. When filing your tax return, include a completed Form 8606 to inform the IRS of the nondeductible contribution amount. You can’t deduct a rollover contribution on your federal tax return because the funds are going into another retirement plan.
• ii.  Employers can contribute to your SEP IRA, however, you cannot deduct these contributions on your federal tax return. Employers can contribute the smaller of 25% of your compensation (maximum limit of $350,000 for 2025 can be considered) or $70,000 for 2025. These limits are subject to cost of living adjustments and may be modified by the IRS from year to year.

5. Excess Contributions.

a. Determining your Excess Contribution. Excess contributions are the contributions to your IRAs for a year that equal the total of: 1.) Amounts contributed for the tax year to your IRAs that are more than your contribution limit for the year. 2.) Any excess contributions for the preceding year, reduced by the total of: a.) Any distributions out of your IRAs for the year, plus b.) Your contribution limit for the year minus your contributions to all your IRAs for the year. NOTE: Do not include amounts that are properly and timely rolled over from a Roth IRA or properly converted from a traditional IRA or rolled over from a qualified retirement plan, when determining your excess contributions.

b. Removing Excess Contributions. For purposes of determining excess contributions, any contribution that is withdrawn on or before the due date (including extensions) for filing your tax return for the year is treated as an amount not contributed. This treatment only applies if any earnings on the contributions are also withdrawn. The earnings are considered earned and received in the year the excess contribution was made. If you filed your tax return without withdrawing a contribution that you made in the tax year, the IRS allows you to have the contribution returned to you within 6 months of the due date of your tax return, excluding extensions. If you make this withdrawal you can file an amended federal tax return with “Filed pursuant to section 301.9100-2” written at the top. You should also report any related earnings on the amended return and include an explanation of the withdrawal. In general, if the excess contributions for a year aren’t withdrawn by the date your federal tax return for the year is due (including extensions), you will be subject to a 6% tax and other taxes may apply. You must pay the 6% tax each year on excess amounts that remain in your IRA at the end of the tax year.

c. Applying excess contributions. If contributions to your IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year, however, your contribution for the later year cannot exceed the maximum contribution allowed for that year.

6. Distributions.

a. Distributions Generally. Distributions from your IRA will be processed by the Custodian upon direction from the Account Owner in a manner that is acceptable to the Custodian. Custodian is not responsible for acting on instructions that were provided in error or that do not provide all the required information. If you direct the Custodian to distribute from your IRA Account before you have reached the age of 59 ½, the IRS describes these as “premature” or “early” distributions. These distributions are subject to a 10% early withdrawal tax which is in addition to the income tax that must be paid on the distribution. There are a number of exceptions to this 10% early withdrawal tax. For example, individuals that are disabled or first-time homebuyers or a qualified reservist are among those not subject to this additional tax. Please consult with a tax advisor for guidance on your distribution situation. Taxable distributions from your IRA are taxed as ordinary income. You can elect to have Federal Tax withheld at the time of distribution. State taxes will be withheld for the required states according to the state’s guidelines. The Custodian’s distribution form will provide the elections available.

b. Required Minimum Distributions. For IRAs (including SEP and SIMPLE IRAs) you must start taking distributions from your IRA by April 1 of the year following the calendar year in which you reach age 73. For each year after your required beginning date, you must withdraw your RMD by December 31st. If you take your initial RMD between January 1st and April 1st, you will have two required distributions for the year as the second RMD is due by December 31st. To avoid having to report two distributions for the same tax year, you can take your first RMD by December 31st of the year you turn 73. If you do not take any distributions, or if the distributions are not large enough to satisfy the requirement, you may have to pay a 50% excise tax on the amount not distributed as required. If you have more than one IRA that is subject to the RMD rule, you can satisfy the requirement by taking the distribution out of one of the IRAs or multiple IRAs as long as the required distribution will be satisfied. For additional information including the amount required to be distributed, please see IRS Publication 590- B. The Traditional Individual Retirement Custodial Account Agreement also had additional information on RMDs in Section IV.

c. Distributions Under Divorce, Levys and Similar Court Directives. In the event that the Custodian is presented with a Court Order to distribute all or part of your IRA due to divorce, Custodian will transfer the assets into an IRA account of the receiving spouse. The portion or amount transferred will have no tax implications to you if the Court Order is received and acceptable to the Custodian. The Custodian reserves the right to request additional information from you or your former spouse to carry out such orders. In some instances, such as a levy or a court order, the Custodian may make a distribution from the IRA Account without instruction from the Account Owner. In those cases, the distribution may be reportable to the IRS as a taxable event.

d. Rollovers. Generally, a rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute to another retirement plan. This rollover must be completed within sixty (60) days from the date you received the payment or distribution. There are several exceptions to this sixty (60) day rule; however, you are required to provide your Custodian with a certification, meeting the IRS requirements, indicating you are eligible for one or more of these exceptions. The contribution to the second retirement plan is called a “rollover contribution.” Common rollovers to a traditional IRA come from: a.) A traditional IRA. b.) An employer’s qualified retirement plan for its employees. c.) A deferred compensation plan of a state or local government (section 457 plan). d.) A tax-sheltered annuity plan (section 403 plan). NOTE: Rollovers from Traditional IRAs or SEP-IRAs into or out of a SIMPLE IRA can only take place after two (2) years. The 2-year period begins on the first day on which your employer deposits contributions in your SIMPLE IRA. Rollovers between two SIMPLE IRAs are not subject to the two (2) year waiting period. Rollovers from Traditional IRAs, SEP-IRAs and SIMPLE IRAs into Roth IRAs must be included in your income for that year. The SIMPLE IRAs are subject to the two (2) year waiting period. Amounts that must be distributed during a particular year under the RMD rules (discussed in Pub. 590-B) aren’t eligible for rollover treatment.

e. One-rollover-per-year limitation. You can make only one rollover from an IRA to another (or the same) IRA in any 1-year period regardless of the number of IRAs you own. The limit will apply by aggregating all of an individual’s IRAs, including SEP and SIMPLE IRAs as well as traditional and Roth IRAs, effectively treating them as one IRA for purposes of the limit. However, trustee-to-trustee transfers between IRAs aren’t limited and rollovers from traditional IRAs to Roth IRAs (conversions) aren’t limited. The 1-year period begins on the date you receive the IRA distribution, not on the date you roll it over into an IRA.

f. Property Rolled Over. If property is distributed to you from your IRA and you complete the rollover by contributing property to an IRA, your rollover is tax free only if the property you contribute is the same property that was distributed to you. For example: if you received cash from your IRA and roll it over to an eligible account, the rollover contribution into the eligible account must be in cash.

g. Partial rollovers. If you withdraw assets from a traditional IRA, you can roll over part of the withdrawal tax free and keep the rest of it. The amount you keep will generally be taxable (except for the part that is a return of nondeductible contributions). The amount you keep may be subject to the 10% additional tax on early distributions as described above.

7. Recharacterizations. You may be able to recharacterize certain contributions by recharacterizing a current year regular contribution plus earnings. Please note, beginning in 2018, recharacterizations of conversions made to a Roth IRA are no longer permitted. If you decide by your tax filing deadline (including extensions) of the year for which the contribution was made to transfer a current year contribution plus earnings from your traditional IRA to a Roth IRA, no amount will be included in your gross income if you did not take a deduction for the contribution. You may also recharacterize a current year contribution plus earnings from your Roth IRA to a traditional IRA by your tax filing deadline (including extensions) of the year for which the contribution was made. A regular contribution that is appropriately recharacterized from your Roth IRA to a traditional IRA may be deductible depending upon the deductibility rules previously discussed. In order to recharacterize a regular contribution from one type of IRA to another type of IRA, you must be eligible to make a regular contribution to the IRA to which the contribution plus earnings is recharacterized. All recharacterizations must be accomplished as a direct transfer, rather than a distribution and subsequent rollover. Any recharacterized contribution (whether a regular contribution or a conversion) cannot be revoked after the transfer.

8. Conversion from a Traditional IRA to a Roth IRA. You are permitted to make a qualified rollover contribution from a traditional IRA to a Roth IRA. This is called a “conversion” and may be done at any time without waiting the usual 12 months. Beginning in 2018, for conversions made in 2018, you are no longer permitted to recharacterize a conversion made to a Roth IRA back to a traditional IRA. Taxation in Completing a Conversion from a Traditional IRA to a Roth IRA – If you complete a conversion from a traditional IRA to a Roth IRA, the conversion amount (to the extent taxable) is generally included in your gross income for the year during which the distribution is made from your traditional IRA that is converted to a Roth IRA.

9. Investments.

a. Investments-No Duty to Review or Monitor Investments. The Custodian shall have no duty or responsibility to review any investment held in the IRA Account or any investment under consideration by the Account Owner or any purchase directed by the Account Owner with respect to any issue, including but not limited to, its safety, risk, suitability or whether or not it should be registered as a security with the appropriate government agencies and shall have no liability with respect to its safety, risk, suitability or whether or not it should be registered as a security with the appropriate government agencies. The Custodian shall not be responsible to investigate or perform any due diligence on any investment, investment sponsor or any principal involved with any investment. Further, the Custodian has no duty to monitor any investment held in the IRA Account. Under this agreement the Custodian provides Custody Services for the assets selected by the Account Owner. Custodian acts on the Investment Directions provided by the Account Owner and has no responsibility for the performance or suitability of the assets selected by the Account Owner. Acting on the Account Owner’s Investment Direction in no way implies endorsement by the Custodian of the assets selected by the Account Owner. The Custodian has no responsibility, authority, or discretion for the selection, purchase, sale, monitoring, or continued holding of any investment in the IRA Account. At its sole discretion, the Custodian can refuse to act as Custodian on any asset selected by the Account Owner. All interest earned on investments by the Account Owner, if any, is the property of the Account Owner. However, the Account Owner acknowledges that fees owed to the Custodian or sub-Custodian may be calculated based on either the net value of account assets or the value of interest earned by the Account Owner, as applicable to the specific circumstances and product offering. 

b. IRA Owner Investment Responsibility. The Account Owner has the full responsibility to review and investigate the assets they direct the Custodian to invest in for their IRA Account. It is the Account Owner’s responsibility, not the Custodian’s, to select and monitor the investments in the IRA Account. The Account Owner has the sole responsibility, authority and discretion for the selection of any and all investments in the IRA Account and accepts full and sole responsibility for such selection. Further, the Account Owner is fully and solely responsible for monitoring any and all investments in the IRA Account and accepts full and sole responsibility for the success or failure of such investments. The Custodian has no responsibility, authority, or discretion for the selection, purchase, sale, monitoring, or continued holding of any investment in the IRA Account. It is the Account Owner’s responsibility to investigate and understand the nature of the investments and risks involved with the investments chosen by the Account Owner.

c. Pledging IRA Assets. If you use (pledge) a part of your traditional IRA account as security for a loan, that part is treated as a distribution and is included in your gross income. You may have to pay the 10% additional tax on early distributions discussed in item 8.) above and in IRS Publication 590-B.

d. Prohibited Investments. The IRS Code does not permit IRA funds to be invested in life insurance or collectibles. The IRS considers the following items as collectibles: artwork, rugs, antiques, metals, gems, stamps, coins, alcoholic beverages, and certain other tangible personal property. The IRS has indicated that there are some exceptions as noted here: Roth IRAs can invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department. It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion. If you invest your Roth IRA in collectibles, the amount invested is considered distributed in the year invested and you may have to pay a 10% additional tax on early distributions.

e. Prohibited Transactions. Generally, a prohibited transaction is any improper use of your traditional IRA account by you, your beneficiary, or any disqualified person. Disqualified persons include members of your family (spouse, ancestor, lineal descendant, and any spouse of a lineal descendant). If you or your beneficiary engages in a prohibited transaction in connection with your IRA account at any time during the year, the account stops being an IRA as of the first day of the year in which the prohibited transaction occurs. The IRA Account is treated as distributing all its assets to the Account Owner at their fair market value(s) on the first day of the year in which the prohibited transaction occurs. If the IRA Account ceases to qualify as an IRA because of a prohibited transaction by you or your beneficiary, you may have a taxable gain that is reportable as income. In addition, you or your beneficiary may have to pay other taxes. Some examples of prohibited transactions include buying property within your IRA Account for personal use, using the IRA Account as security for a loan and borrowing money from your IRA. Prohibited transactions are described in Internal Revenue Code (IRC) Section 4975. It is the Account Owner’s responsibility and not the Custodian’s responsibility to determine if a transaction constitutes a prohibited transaction. The Custodian reserves the right to request a certification from the Account Owner that the direction provided by the Account Owner does not create a prohibited transaction, however, if a certification is not requested that does not indicate a transaction is not prohibited. Custodian reserves the right to take any action necessary, within its discretion, which may include resigning from the IRA Account.

10. Inherited IRAs/Beneficiaries. Account Owner’s should review and update their IRA Account beneficiaries by providing the Custodian with a completed Beneficiary Designation Form. This is especially important after life changes such as marriage, divorce, death, and birth or adoption of children. If you inherit an IRA, you are called a beneficiary. A beneficiary can be any person or entity the Account Owner chooses to receive the benefits of the IRA after he or she dies. Beneficiaries of the IRA must include in their gross income any taxable distributions they receive.

a. Inherited From Spouse. If you inherit a traditional IRA from your spouse, you generally have the following three choices. You can do one of the following: a.) Treat it as your own IRA by designating yourself as the Account Owner b.) Treat it as your own by rolling it over into your IRA, or to the extent it is taxable, into a Qualified employer plan, Qualified employee annuity plan (section 403(a) plan), Tax-sheltered annuity plan (section 403(b) plan), or Deferred compensation plan of a state or local government (section 457 plan). c.) Treat yourself as the beneficiary rather than treating the IRA as your own. If you make contributions (including rollover contributions) to the inherited IRA or if you don’t take the RMD for a year as the beneficiary of the IRA, you will be considered to have chosen to treat the IRA as your own. You will only be considered to have chosen to treat the IRA as your own if: a.) You are the sole beneficiary of the IRA, and b.) You have an unlimited right to withdraw from it. However, if you receive a distribution from your deceased spouse’s IRA, you can roll that distribution over into your own IRA within the 60-day time limit, as long as the distribution isn’t an RMD, even if you aren’t the sole beneficiary of your deceased spouse’s IRA. See Publication 590-B for more information on RMDs.

b. Inherited From Someone Other Than Spouse. If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. This means that you can’t make any contributions to the IRA. It also means you can’t roll over any amounts into or out of the inherited IRA. However, you can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of you as beneficiary. See Pub. 590-B for more information. Like the original owner, you generally won’t owe tax on the assets in the IRA until you receive distributions from it. You must begin receiving distributions from the IRA under the rules for distributions that apply to beneficiaries. Beneficiaries of an inherited IRA must generally begin receiving required minimum distributions by December 31 of the year following the year of the deceased person’s death.

11. No Tax, Legal or Investment Advice. In its role as Custodian, Digital Trust, LLC does not provide any tax, legal or investment advice. It is your responsibility as the Account Owner to consult with your investment or tax advisor. The Custodian shall act on the Account Owners directions for transfers, investments and distributions of Fiat when the Account Owner has submitted directions in the manner required by Custodian. The Custodian is not responsible for losses or damages resulting from the delay of acting on a direction if the direction is unclear, incomplete and not in acceptable form to the Custodian. Additionally, the Custodian is not responsible for the performance of the assets selected by the Account Owner. Under this agreement the Custodian provides Custody Services for the assets selected by the Account Owner. Custodian acts on the Investment Directions provided by the Account Owner and has no responsibility for the performance or suitability of the assets selected by the Account Owner.