Home Storage Gold IRA
The Taxpayer Relief Act of 1997 broadened the permissible types of investments allowed in IRA’s and alerted taxpayers to a new option, self-directed IRA’s capable of holding IRS-approved precious metals and products, in addition to customary “paper” financial products. The “home storage” aspect didn’t achieve any type of notoriety until mid-2014. But it’s really nothing new. It’s just that some advertisers saw an opportunity to take advantage of the losses and fears created by the 2008 economic debacle, by putting a new spin on the definition of a “trustee,” as described in Internal Revenue Code Section 408(a) and giving it a “new look.” They created terms like LLC IRA, checkbook IRA, and home storage IRA, but the Code wasn’t changed in any way, only the presentation of a slick interpretation. It is a very small universe of taxpayers in a position to truly qualify for a home storage gold IRA and even that is a misnomer.
Home storage Gold IRA sounds simple enough and the benefits seem obvious, but it’s important to realize that the IRS didn’t intend for regular taxpayers to act as trustees of their own IRA’s, or the Code would have been written very differently. So, there are severe requirements for “home storage” qualification and severe penalties for a failure to properly comply. Those advertising products designed to help you set up a home storage gold IRA tend to highlight obvious benefits, but somehow manage to leave out the difficulty and expense of meeting qualification requirements.
Another consideration is the fact that few if any of those advertising such assistance assume any responsibility or liability whatsoever for your compliance, or for audits that might be initiated, and/or for penalties that may be assessed if found to be out of compliance by the Internal Revenue Service.
Home Storage Gold IRA Facts
Home storage Gold IRA is an attractive concept, but the requirements are substantial and the penalties for failure to comply can be more than substantial. Advertisements for such products are very exciting and enticing at face value, but before you put your hard-earned money into such an opportunity, you’ll definitely want to do your homework.
Many people hear about IRAs and envision a risky system of storing up assets in the vault of a credible trustee.
The entire concept changes when we consider the idea of adding precious metals into the IRA. Regular IRA assets such as bonds and stocks are assets bought with money and expected to appreciate over time. They are a couple of papers with a latent value representing percentage ownership of a virtual stake in a company or products.
Several options are available to people who develop an interest in running an IRA account. Concerning bonds, they can erect a vault or secure safe somewhere and store the papers in a waterproof environment where they can be left to cool off for as long as you want. And as it pertains to retirement plans, we are talking about storing the assets for as long as 30-40 years which may extend beyond your active working years.
People have often entrusted their acquired assets and cash savings with trusted 401k account managers who will later take their cut off your holdings, and ultimately, it will be heavily taxed upon contribution and when it matures.
Click here to view an article written by an attorney that you might find helpful and informative, when considering the utilization of a precious metals home storage Gold IRA.
Home Storage Gold IRA Qualification
A home storage Gold IRA requires that you meet the following list of qualifications and if found not to be compliant, the purchase will be treated as a taxable deduction from your retirement account. As a minimum, a precious metals home storage Gold (precious metals) IRA requires:
- You must have or create a limited liability company, in your name, and with a specially written operating agreement.
- After incorporation and audits, you must have a minimum net worth of at least $250,000.
- All employees and trustees of the company must put up a $250,000 fidelity bond as corporate insurance.
- Ownership of the trustee corporation must be divided between several people.
- Applicant must have verifiable fiduciary experience with a “reputable financial background” and prove to have had experience handling retirement funds.
- The trustee corporation for your IRA must have a business location that is open to the public.
- Applicant must have corporate legal counsel on retainer and provide a detailed audit by a qualified public accountant annually.
A fact of the matter is that a home storage IRA increases your odds of an audit and if the IRS deems your arrangement to be non-qualified, your IRA assets will lose their tax-deferred status and become subject to immediate taxation (at current applicable rates). If you’re under 59½ years of age, you’ll receive a 10% penalty for early withdrawal in addition to any taxes owed (some states also have applicable taxes). The odds for a typical taxpayer to qualify for a home storage Gold IRA are very low.
American Bullion is a well respected pioneer in the Gold IRA and is well equipped to help you take advantage of this valuable, yet underutilized retirement tool. With an American Bullion Gold IRA, your metals are secured by the Delaware Depository, the same exchange approved company trusted by NYMEX, COMEX, and ICE Futures US.
Call American Bullion at (800) GOLD-IRA, that’s (800) 465-3472 where experienced Gold IRA specialists will make your transfer or rollover of a qualified plan, tax-free and hassle-free. Don’t be deterred if a home storage Gold IRA isn’t for you. There is nothing wrong or difficult about fully complying with IRS rules to store your precious metals in an off-site, IRS approved, “private” depository, until your retirement age!
Investing in a precious metals IRA is a golden option that enables you to evade certain fees or taxes on savings.
The IRS places a heavy embargo on ensuring that commodities like gold, silver, platinum, and palladium can become a good store of value. Thus, they monitor who gets to buy which “precious metal,” Also, there must be efficient management to preserve the metals.
Hence, the IRS recognizes certain IRA holding companies as legit custodians of trustees for individuals and firms looking to invest a lump sum in precious metals. Thus the issue of adequate storage comes into play.
You can opt to invest through a third-party custodian by using the cash or assets in your IRA to buy a specific precious metal such as gold. In this method, the custodian/trustee stores the gold coins or bars in a safe and secure location that can hold the treasures for as long as you want.
The other option is a Home storage IRA. Similar to what was highlighted earlier, you can opt to store your paper currencies or assets such as bonds and stocks in a bank’s safety deposit box or your own home safe.
The key difference is that you are in full control of your stored assets and can opt to sell at any time.
How Home storage Gold IRA works?
Briefly and as a minimum, understand that a home storage Gold IRA requires the same degree of owner responsibility and accountability as any other IRA.
In real life, -according to its promoters- the process of Home Storage Gold IRA is very practical. Once you understand the facts and decide to open a Home Storage IRA, the company you agree to go with will set up a LLC (for a fee) for your IRA and appoint you as the non-compensated manager. Once the LLC is set up, you can go to the bank of your choosing and open a checking account in the name of the LLC.
This checking account and its accompanying “checkbook” will now function as your investing platform. If you want to purchase an asset for your IRA, you can write a check. Therefore, the next step is to open up a self-directed IRA so that you can fund it through your new LLC account. After this process, you choose your precious metals from IRA allowable precious metals and get them shipped to your choice of address. It can be your home, or a nearby bank with a storage facility.
Failure to comply with the IRS requirements of a home storage Gold IRA could easily cost far more than the potential advantages. If you don’t have cost-effective access to the ingredients required for a home storage IRA, but would still like all the advantages of home storage, then consider making a cash investment and not worrying about the requirements of an IRA. Home delivery of physical precious metals can be quick and discreet.
Is it illegal to start a Home storage IRA?
Considering the application for cash and other paper assets, it doesn’t seem a big deal, but people begin to ask questions about precious metals. Am I doing something illegal when I store up gold in my home?
The major reason is that there is a standing rule that nobody can hold any precious metal IRA assets without a legitimate custodian. That sounds like a “Nay” to individual custody of the assets.
Independent retirement accounts are highly regarded as they symbolize a rigid partnership between account holders and the IRS. This arrangement facilitates the benefits of delays or reduced taxation that IRAs offer their holders.
Studying an organization like American bullion will show you that’s not it. Home storage IRA is a recognized approach duly recognized by the IRS, albeit when certain rules are observed.
Any information stating that Home storage IRAs are illegal effectively obscures the truth and misleads people.
The legit side of a Home storage IRA is dependent on if you have an LLC set up to help store up your precious metal. Such a company must have duly notified the IRS via the written application and offer evidence that you, as an intending holder, have satisfied a long list of requirements.
Some of the most applicable information needed by the IRS includes the fiduciary experience of the LLC (that is if the company had ever represented someone before in a related case) and the fiduciary ability (a legal binding that affirms that the LLC can represent an investor). Core details like the fitness to handle retirement assets and the net worth of the represented person will also be determined.
Subsequently, the IRS will conduct an intensive round of audits to ensure that all the provided details are valid, and until they issue a notice of approval for the application, you will be breaking the law if the LLC proceeds to act as a trustee.
This is the reality, so do not be deceived by the ABC-easy steps that most companies in the IRA department often use to deceive people about how easy it is to establish a home storage IRA. It is not as easy as buying a car. The secret to the home storage IRA is that you can be the owner of the LLC as long as you can satisfy the IRS requirements.
Government policies over home storage IRA
The US government set up all measures to protect the interests of retirees. Otherwise, letting people have direct control over their retirement accounts is pretty easy. The trustee requirement while tasking is quite safe under legal circumstances. Without a trustee bound by law, you cannot tell where and how your gold coins are being kept.
All assets and commodities must be reported to the government in case of a distribution and a withdrawal. It is fair to say that government policies do not make it easy at all to own and control your assets.
If the IRS intended for taxpayers to manage and maintain their own IRA accounts, then the laws would have been written very differently.