A Self-Directed IRA places more of the documentation burden on the account holder than a conventional brokerage IRA. This article covers what records to keep, why each category matters, and how the records you maintain interact with the filings Digital Trust makes on your behalf.

When you hold a Self-Directed IRA (SDIRA), the Internal Revenue Service (IRS) treats your IRA as a separate taxpayer from you personally, with its own books and records. Digital Trust, the custodian for your Retired.com account, maintains the account-level records the IRS requires of the custodian — but several categories of supporting documentation sit with the account holder. The records you keep are what stand behind your tax positions, support your Fair Market Valuations, and prove the legitimacy of investments if the IRS ever asks.

For the broader split of responsibilities, see "Your responsibilities vs. Retired.com's responsibilities". This article focuses specifically on the records you should be keeping.

A conventional brokerage IRA holds public-market securities. The brokerage has every trade ticket, every dividend, every cost-basis adjustment in its own systems. The account holder rarely needs to keep supporting records — the brokerage's books are the records.

A Self-Directed IRA holds alternative assets — real estate, private equity, promissory notes, LLCs, precious metals — that the custodian did not source, evaluate, or value internally. The supporting documentation lives with the account holder, the sponsor, the borrower, the title company, or the appraiser. The custodian holds the position; the account holder holds the paper trail.

If a question ever arises — from the IRS, from a Compliance examination, from an estate executor, from a tax advisor preparing your return — the records you've kept are what answers it.

The following categories cover the most common SDIRA recordkeeping needs.

For every investment held in your IRA:

These documents establish what the IRA owns. Keep them indefinitely — at minimum, until several years after the investment has been fully exited.

For each non-publicly-traded asset, the IRS requires an annual FMV — reported by Digital Trust, the custodian for your account, on Form 5498. The custodian files what you provide; the underlying valuation must be supported by an independent source. See "What is fair market valuation (FMV) and why it matters" for the full FMV framework.

For each annual valuation, keep:

Keep FMV records for at least seven years after the year they cover, to align with IRS audit lookback periods.

If your IRA earns income (rent, interest, dividends, distributions from a fund) or pays expenses (property taxes, repair invoices, fund management fees), keep records of each event:

Two rules to keep in mind:

If you make non-deductible Traditional IRA contributions, perform Roth conversions, or take distributions from an account with basis, you must track your basis on IRS Form 8606. This is the only authoritative record of your after-tax money in a Traditional IRA. Keep:

Without an accurate Form 8606 history, the IRS treats all Traditional IRA distributions as fully taxable — even amounts that should have been recovered tax-free. See "Traditional IRA — overview and eligibility" for the basis framework.

For any distribution from your IRA:

For investments that involve any close call on disqualified-person rules — particularly investments in LLCs, partnerships, or entities where you, family members, or your advisors hold positions — keep documentation that establishes the disqualified-person analysis:

These records may be what protects the account from a later prohibited-transaction determination.

A working rule:

Seven years is the conservative outer edge of IRS audit lookback for most situations. For fraud or unfiled returns, there is no statute of limitations — keep records you would want if those issues ever surfaced.

For audit-specific guidance and a more detailed checklist, see "Audit readiness — what documents to keep".

Anything in the "You keep" column is yours alone — Digital Trust cannot reconstruct it for you.

We recommend consulting a tax advisor or attorney for guidance specific to your situation.

If Digital Trust keeps records too, why do I need to keep my own?

Digital Trust's records are account-level — transactions, balances, IRS filings. The records the IRS may want from you in an audit are usually substantive: the appraisal that supports an FMV, the K-1 that explains a private fund's allocation, the Form 8606 history that establishes your basis. Those aren't in the custodian's records.

Can I keep records digitally, or do they need to be paper?

Digital records are fine. The IRS does not require paper — what matters is that the records are complete, legible, organized, and available when needed. Many SDIRA holders keep a per-investment digital folder with subfolders for purchase docs, annual valuations, income, and expenses.

What if I lose records?

For records originated by a third party — sponsors, appraisers, recording offices, employers — request copies from the source. For records originated by you (your own calculations, expense logs), reconstruct as best you can from supporting third-party records. We recommend consulting a tax advisor or attorney for guidance specific to your situation, particularly if a Form 8606 history is missing.

Does Digital Trust audit my records or my Fair Market Valuations?

No. Digital Trust files the FMV you provide and processes the transactions you direct through the Retired.com platform. The substantive review of your records sits with you, your tax advisor, and — if it ever comes to that — the IRS.

Select "Start a Conversation" from the Chat menu or call us at 1-800-RETIRED

Retired.com is a platform that connects clients with its affiliated entities, including Digital Trust, BitcoinIRA, WAO Advisory, Rocket Dollar Capital, and Rocket Dollar Advisor. Digital Trust is an independent, directed, non-discretionary trust company that is registered and regulated in the state of Nevada. While Retired.com facilitates connections to these services, it is not itself a custodian, digital wallet, exchange, broker-dealer, registered investment advisor, or a company involved in trading publicly traded assets. All information provided is for educational purposes only and should not be taken as investment, legal, or tax advice. We encourage you to consult with a qualified advisor or professional to determine the most suitable options for your individual needs.