So, you want an IRA. You also want physical gold. How can you combine the two to build your best retirement? The answer is a Gold IRA, but you want to get things right from the very beginning to avoid trouble with the IRS and maximize your portfolio potential. Learn four of the most important facts about storing physical gold in an IRA.
Storing Physical Gold in an IRA
Start with a trusted custodian.
You can’t move or add gold that you already have into a Self-Directed IRA. Instead, you must buy through a custodian. The custodian buys the gold on your behalf and arranges delivery to a facility that specializes in protecting precious metals.
When you hold physical gold in an IRA, you’re not the one who’s supposed to be keeping the gold. Instead, the gold is held by a financial institution, such as a bank or a credit union, or by an IRS-approved non-bank facility, such as a depository.
U.S. Money Reserve can help facilitate the whole process, from opening your IRA with a vetted custodian to arranging secured and discreet delivery of your gold to an IRS-approved depository.
Do not keep the gold in your home.
The IRS makes it clear that it doesn’t want anyone storing gold from a Self-Directed IRA at their home or in their own safe deposit box. It's one of the most important gold IRA guidelines.
If you try to store gold at home that's supposed to be held in a Self-Directed IRA, the IRS likely will view that as an IRA distribution that’s subject to taxation and, if you’re under 59½ years old, an additional 10 percent penalty for early withdrawal.
Furthermore, storing IRA assets in your own home might be considered “self-dealing,” the Industrial Council for Tangible Assets says, and could be treated by the IRS as a prohibited transaction. A prohibited transaction refers to distribution of all the assets in an IRA, not just gold that’s being kept at home. Bottom line: if something's “prohibited,” it's best to avoid it. Your retirement is too important to put at risk.
Keep in mind that if you want to keep physical gold at home, you can still do so as long the gold isn't part of an IRA. You're free to buy as many gold coins and gold bars as you desire and store them at home. It's your right as an American citizen. Hold on to your physical gold until you're ready for retirement or pass it on to future generations—just don't claim that any of it is part of an IRA.
Steer clear of anyone that promotes “home storage.”
The council points out that some precious metals dealers have promoted “home storage” of physical gold in a “checkbook LLC” to skirt the IRS’s ban on holding gold that’s supposed to be in your IRA at home. A “checkbook LLC” refers to a self-managed business that’s created by the IRA owner to buy and hold bullion in his or her IRA.
Some precious metals dealers believe a “checkbook LLC” enables the IRA owner to store physical gold in his or her home because the bullion is owned by the LLC, and not directly owned by the IRA.
“The ‘home storage’ concept may conflict with the laws that allow for tax-advantaged IRA investments,” the council warns. “Purchasing and holding assets in an IRA on a pretax basis is a great benefit. To continuously receive that benefit, the IRA assets must be held by a financial institution or an IRS-qualified IRA custodian.”
Let U.S. Money Reserve be your guide.
At U.S. Money Reserve, we work with you to assist you in the process of opening a Self-Directed IRA. Once funded, we contact you to order the gold (or silver) you want to include in your Self-Directed Precious Metals IRA. We then arrange insured and discreet delivery to an IRS-approved depository for safekeeping.
In other words, you don’t hold the physical gold. The depository will keep close track of your gold to make sure it’s safe; the gold is insured while it’s there. Depending on your wishes, the gold you own through a Self-Directed IRA and store at the depository can be held in the same storage area with precious metals from other asset holders or can be kept by itself. Regardless of how the gold is stored, though, it belongs to you.
Though the rules surrounding retirement accounts and gold IRAs may seem murky, the experienced IRA Account Executives at U.S. Money Reserve can help clear things up. Get started with a free IRA consultation today. Call 1-844-307-1589 to learn more about U.S. Money Reserve’s Gold Standard Precious Metals IRA program.
*Nothing herein should be considered as tax or retirement advice as U.S. Money Reserve cannot and does not offer tax advice. Clients should consult an attorney or tax advisor for specific tax or legal advice. U.S. Money Reserve does not guarantee the performance or service of any depository or IRA custodian. Estimated third-party storage and administrative fees are subject to change at the discretion of the selected independent IRA custodian and depository.