You’re likely aware of the possibility to invest in gold, precious metals, and other valuable metals if you have a self directed IRA account. As more companies advocate the idea of storing silver and gold at home in an IRA LLC (or in a safe deposit box), we would like to draw attention to the differences between storing precious materials at a depository provided by an IRA provider and storing it at home using an IRA LLC. You can get the best rated gold IRA on our place.
Companies that promote home storage are not always clear about all the details. They may not be able to explain the risks and benefits of using a depository that specializes only in precious metals storage through an IRA administrator. This is why these companies often refer you directly to your own lawyer for guidance.
The following is a comparison that aims to provide the information you need to make informed decisions about your precious metals account.
* Every year, the IRS receives notification that your IRA is the owner of the LLC.
* Metals are not an option for investment. Only US-minted Eagles can be used as a metal.
* The IRA owner must give the IRA provider third-party confirmation of the LLC’s worth, including any metals it may own and any cash.
* Insurance for home-stored metals is not possible at any reasonable cost.
* Safe deposit box storage cannot be insured by the bank. (ex: $100K = $200/yr $50K = $110, $20K = $75)
* The metals are still your IRA’s property, and you cannot make any prohibited transactions with them. Your IRA could be at serious risk. You could use the metals as collateral for a personal loan or take personal ownership.
* The LLC must first report any distributions of metals or assets to the IRA provider in order to be reported to IRS.
* You may not be allowed to provide storage space for LLC assets in your private safe or back yard.
* The LLC must have an account with a bank that is open for business. This account may be subject to monthly fees.
* Bank safe deposit boxes are available for $15-$65 annually or more. Remember that silver eagles use a lot more space per $1.
* The annual fees of an IRA provider for LLCs is often higher than that for direct-metals ownership.
* The IRA owner must keep the LLC’s books.
* An annual report and filing fee may be required to register the LLC.
* Set up an LLC and pay the legal fees
* If the IRS claims that a prohibited activity occurred, it is up to the taxpayer to prove that the IRA holder received no personal benefit. You are presumed guilty until proven otherwise in tax court.
* Metals owned by the individual are more likely to be sold with greater care because there is no evidence of “chain-of-possession”. This means that metals may not have been altered and the value of the metals could decrease.
* Your IRA provider will not notify the IRS that you have metals in your IRA.
* You can invest any of the allowed metals.
* Select from a variety of depository firms that specialize in holding metallics.
* You can distribute or sell metals at any moment.
* There is no need to provide an annual confirmation of value to the IRA provider. This is done automatically by IRA providers.
* Any metals that are stored in the depository fees include insurance.
* You are practically ineligible to engage in a prohibited transaction
* IRA provider fees also include banking accounts and bookkeeping
* IRA providers often charge metals fees that are lower than other assets.
* Depositories allow you to choose between specific or mixed storage.
* No state reporting is required.
* No legal fee or LLC creation fees are required.
* An IRA can easily be created and is ready for purchase in a significant time frame.
It may seem appealing to have your IRA’s precious gold sitting on your kitchen counter, but most of our clients know that holding your IRA metals with a professional administrator is a better option. There are less stress, hassle, and fewer risks.
Many investment strategies have multiple factors to consider when making the right decision. To make educated IRA investment decisions, it is crucial to learn about IRS rules.