A Warning: Gold IRA Home Storage
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Gold IRA Home Storage? Don’t Believe the Hype!

dont trigger an irs investigationAs industry watchdogs and the IRS make their position clear, there will be no excuse when the fines start coming

In the competitive Gold IRA market, bullion dealers are always looking for a unique edge to bring in more clients.

Some of the less market-savvy brokers thought they’d found the perfect solution – Home Storage Gold IRAs – but as their customers could be finding out soon, they’re not a good idea.

For keen “Gold Bugs” one of the drawbacks with a gold IRA is the fact that you need to keep your gold in an IRS approved depository, under the watchful eye of a custodian or trustee.

For some there’s an If You Don’t Hold It You Don’t Own It mentality at work, meaning the thought of your gold sitting in a distant bullion vault far from home is not a pleasant one.

So when a handful of gold dealers came up with the idea of a Gold IRA where you can “legally” store your precious metals at home and enjoy them at your leisure – it was set to be a sure-fire winner.

Of course the more respected bullion dealers warned their clients against it, saying the practice was a clear-cut case of self-dealing, something that can cause the IRS to happily close down your IRA account – but the group of home storage IRA rebels carried on regardless.

And naturally the Home Storage IRA was popular – new customers flocked to the companies offering the service, setting up their accounts using some “loopholes” in the IRS regulations.

home storage iraCustomers would set up an LLC of which they would be the CEO, the LLC would have it’s “headquarters” in the client’s home and the “company” would buy investment gold from the gold dealer. The LLC would then be held by the self directed IRA as is permitted in IRS legislation and everything was simply fantastic.

The bullion dealer sold more bullion and collected set-up fees and the client was able to caress his or her gold in the comfort of their own home.

What could possibly go wrong?

Well for a start the most basic concept of a home-storage IRA directly contradicts the language in Internal Revenue Code Section 408(m) – which clearly states that IRS approved bullion must be held in the “physical possession” of a financial institution or an IRS-approved nonbank custodian, such as a depository.

Now unless your hastily thrown together LLC was a bank or other financial institution, or you’d gained approval from the IRS as a non-bank custodian, chances are your Walmart home safe does not meet those requirements.

If the IRS code isn’t clear enough the Industry Council for Tangible Assets (ICTA), North America’s national trade association for precious metals, issued a white paper entirely focused on “Home Storage Gold IRAs” which said in no uncertain terms that all IRA owned precious metals MUST be held in the physical possession of either a U.S. financial institution or an IRS-approved nonbank custodian, and absolutely not in the home or direct physical possession of the IRA account holder.

home gold ira is self dealingHaving direct physical possession of an asset in your home is the very definition of self-dealing: you have immediate benefit of the asset.

Just because you’ve taken the clever step of removing yourself from the equation, holding the gold in your hand, in a company that you fully control, does not somehow magic the gold into being an approved transaction.

There’s a strong argument that all you’ve done is make a “prohibited step IRA transaction” where the IRS will rightly disregard the cunning step you took to hide this self-dealing trade.

If that weren’t clear enough, the IRS has doubled down on it’s non-approval of home storage gold IRAs in a recent statement:
 

Gold and other bullion are “collectibles” under the IRA statutes, and the law discourages the holding of collectibles in IRAs. There is an exception for certain highly refined bullion provided it is in the physical possession of a bank or an IRS-approved nonbank trustee. This rule also applies to an indirect acquisition, such as having an IRA-owned Limited Liability Company (LLC) buy the bullion.

Still believe a home storage IRA is a good idea?

Well if you think extra taxes, penalties and fees on your whole IRA along with an ever so fun IRS audit is a good idea, then by all means go fill your boots.

But if you’d rather learn the right way to buy gold in the most cost-effective and tax-efficient manner – our free Gold IRA Guide and Investor Kit, can be delivered 100% free of charge direct to your doorstep.

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