Buyer Beware

The At Home Gold IRA….Store Metals Where You Choose

You may have recently seen an “At Home Gold IRA”, “Home Storage Gold IRA”, “See, Touch and Hold Your Gold” being advertised or “Store Your Metals Where You Choose”. But what you may not know is that this is really an advertisement for you, the investor, to establish a Limited Liability Corporation to hold the precious metals for your IRA in your home or, in reality, a bad scheme to sell gold, silver or other precious metal for IRA holdings.

Now while this sounds good, I caution you. I understand wanting to control your investment yourself, not relying on a third party and having privacy regarding your investment, but the truth is one must be extremely careful and know the risks involved.

With all the buzz going around about this subject that buzz doesn’t sound very good. In a recent article from The Wall Street Journal (Want to Keep Gold in Your IRA at Home? It’s Not Exactly Legal), this subject was broached. In the article, it specifically quotes experts on alternative assets IRA’s saying “the result is on the IRA rules are intended to prevent-which is that the account owner possesses tangible personal property belonging to the IRA”.

In addition, it quotes the IRS saying that it “warns taxpayers to be wary of anyone claiming that precious metals held in your IRA can be stored at home or in a safe-deposit box.”

More details about this subject can be found at the Internal Revenue Service’s website in Publication 590A and Section 408(m)(3).

Even though this above-referenced publication is not specifically clear on this matter, I would advise you, the investor, to be very skeptical of such a maneuver.

At a minimum, a precious metals home storage IRA requires:

  • Limited Liability Company

    You must have or create a limited liability company, in your name, and with a specially written operating agreement.

  • Net Worth $250,000+

    After incorporation and audits, you must have a minimum net worth of at least $250,000.

  • Corporate Insurance

    All employees and trustees of the company must put up a $250,000 fidelity bond as corporate insurance.

  • Ownership by Several People

    Ownership of the trustee corporation must be divided between several people.

  • Verifiable Fiduciary Experience

    Applicant must have verifiable fiduciary experience with a “reputable financial background” and prove to have had experience handling retirement funds.

  • Location Open to the Public

    The trustee corporation for your IRA must have a business location that is open to the public.

  • Corporate Legal Counsel

    Applicant must have corporate legal counsel on retainer and provide a detailed audit by a qualified public accountant annually.

While there have been many investors flocking to a precious metals IRA recently, keep in mind that they have established their precious metals IRA with an established company and/or custodian. This is their specialty as they are experts in this type of investing. There are many legitimate companies that offer a gold, silver or other precious metals IRA such as Regal Assets, American Bullion, Lear Capital and so on. Do your due diligence and find one if for only protecting your hard earned assets from what may come.

While referring to an Individual Retirement Account holding precious metals, if your metals are not held by a trustee, your investment can be considered a taxable distribution from your account. In turn, your tax deferred status will be lost and your assets will be subject to immediate taxation. Additionally, if you are under the age of 59 ½, you will also be subjected to a 10% penalty for what is considered an early withdrawal as well as any taxes that may be owed.

If you read carefully on the websites that are promoting these at home gold iras, you will certainly see a “disclaimer” which typically states they do not provide legal or financial advice to investors.

Now I will be blunt….if you want a precious metals IRA, my advice is to do it right. Start by finding a Gold IRA Custodian who can help you every step of the way, choose your bullion and have it stored in a professional vault through a reputable company. Play by the IRS’s rules and you can’t go wrong.