Anything that holds intrinsic value and is essential for economic wealth must be stored in the most secure way possible. The same is true when handling gold and any other precious metals.
Some investors and owners of gold are wary that they might lose their gold because of thieves and dishonest workers. With this in mind, storing it in your home seem a viable option. But is it really? And, can you do so with the approval of the IRS?
In this article entitled "Home Storage Gold IRA Scams", we will be answering questions related to storing gold in your home. Read on to learn more.
Gold - A Valuable Asset
Investing in gold can be a great way to diversify your investment retirement portfolio, lower your risk, and safeguard your wealth.
Gold-backed individual retirement accounts (IRAs) are one approach to protecting your retirement savings against market vulnerabilities and near-record high inflation.
Before you settle on a gold IRA account, it's crucial that you shop around to get a feel for the various organizations that offer these types of IRAs.
Whether you're new to the concept or a seasoned investment pro, giving research its due diligence is always a must since the markets are always changing.
With a self-directed IRA, you must invest in precious metals such as gold in order for it to be considered a retirement account. Physical assets, such as precious metals, real estate, enterprises, and stocks are also available.
Many investors and buyers alike are in business with an IRA firm that provides investment and storage services, such as Goldco.
One of the most common questions we receive at Your Gold IRA Guide is, “Can I do gold home storage and do so legally in the eyes of the IRS?” And, “Is it really a safe method?“
Gold IRA - How Does It Work?
A gold IRA is a type of self-directed IRA, in which you are allowed to invest in alternative assets, such as gold, silver, palladium and other precious metals. These are kinds of assets that are not typically permitted under Roth and standard IRAs.
A gold IRA is a type of investment retirement account approved by the Internal Revenue Service (IRS). In this type of account, you purchase precious metals from a dealer and then have a custodian store your assets.
Over time, you can add precious metals to your account. By working with a gold IRA firm, you can gain advice from a financial expert on how best to invest your precious metals.
Today’s IRA firms in the industry also aim to educate clients in order to boost their economic and wealth literacy, which ensures you are making smart investment decisions. It’s especially important to work with a reputable dealer to ensure the advice you receive is accurate and in your best interest.
By and large, the IRA industry is legitimate, but there are always some “bad apples” no matter what financial sector you are working with. One example of bad advice would be storing gold in your own home.
Is Home Storage of Gold Legal?
The short answer is no. While there are some situations in which it is feasible, a vast majority of applicants would not meet the qualification requirements.
Despite what you might have read about online, it is illegal to store physical gold in your home, safe deposit box or other facility in which you have direct access and claim it as part of your investment retirement account.
There are some gold IRA firms and companies that encourage their clients to store gold and precious metals at their own properties.
They seem to think that if their clients establish themselves as a limited liability company they can skirt the rules. This is not the case and should be avoided.
The scheme goes something like this. After an investor creates a precious metals IRA, the company encourages them to declare themselves as the owner and trustee of the IRA, giving them the dubious power to store their gold how they choose.
This is illegal and not allowed by IRS’ rules on IRAs backed by precious metals. Attempting to sidestep the IRS’ rules will likely lead to fines and possibly criminal charges, all depending on the circumstances.
As we stated above, storing gold claimed in an IRA account at your residence is illegal. That is, unless you you pass very stringent qualifications and requirements. These include:
- Apply and be approved to be a custodian by the IRS
- Proof of related experience and financial competence
- Excellent track record as a trustee and/or custodian
- Excellent track record of past business
- Capacity to handle wealth and assets
- Solid bond and stocks standing
- Ability to handle audits, both personally and by the government
- Net worth
- Other essential qualifications
Keep in mind that the qualifications to store your own gold IRA at home is so high that average individual will likely never be considered by the IRS.
An inability to meet even one of the qualifications mentioned above is enough to prevent you storing your gold- or precious metals-backed IRA at home.
At Your Gold IRA Guide, we highly recommend not even attempting to store your own gold at home. For one, you will most likely be refused by the IRS.
Secondly, attempting to put yourself in a position where you could feasibly hold your own IRA assets is not worth the time or trouble.
The Hard Truth on Gold IRA Physical Possession
Hopefully at this point we’ve swayed you from the idea of trying to establish a gold IRA eligible depository within your own home.
The process of creating a limited liability, declaring yourself a trustee, etc. would most likely not be worth your while unless you are a multi-millionaire (preferably a billionaire), and/or you have all the resources available to meet the qualifications.
Of course, there will still be those firms that try to sell you on the idea of storing your own gold self directed IRA at home.
They may even tell you they can solve all the hurdles previously mentioned. If you fail to heed these warnings, just know that the IRS will undoubtedly impose severe fines on you if you choose not to following the rules to the letter.
Focus on your dream of a steady investment with minimum risks. And, always be cautious whenever you are dealing with a financial institution that insists gold IRA physical possession – it most certainly is not!
Now that you’ve (hopefully) come to your senses, let us recommend our preferred gold IRA firm, Goldco. They are dependable, reliable, trustworthy and, if you are a first-time investor in precious metals, they are simply one of the best firms to work with.
Frequently Asked Questions
Owners of gold IRAs must keep their precious metals in an IRS-approved depository. This is a storage facility dedicated to the safekeeping of tangible precious metal assets like gold and silver.
Previously, the IRS only permitted investors to keep their funds in depositories located within the United States. Now, investors can store their assets in recognized depositories around the world.
Metals such as gold (must be 99.5% pure), silver (must be 99.9% pure), and platinum and palladium (must be 99.5% pure) can be stored.
Other metals and coins are not eligible for IRA accounts. If you encounter a firm encouraging the depositing of such coins, never contact them again or better yet, report them to the appropriate authorities. You can read more about these scams in the IRA industry here.
The IRS will be unforgiving, as they should be, if they find out that you are violating their terms and regulations and are unlawfully storing gold and other precious metals at a facility that is not IRA-approved.
You will be hit with a multitude of taxes, penalties, added expenses, etc. Expect a personal level of auditing too! And always bare in mind that, in addition to fines, you might even have to serve prison time.
Opening your own gold self-directed IRA is a great way to secure your financial future by investing in inflation-resistant precious metals.
It goes without saying that it is imperative to protect yourself financially. This also means following the rules and avoiding fines and penalties. That is why we always recommend customers look out for schemes and scams within the industry.
If a company or firm is encouraging you to store your precious metal assets at home, you should report this to the Internal Revenue Service.
Be sure to only work with trusted precious metals dealers. That way you will be assured that the IRS will not come after you for violating the rules.
Thank you for reading our article. If you have any comments, questions, or suggestions, please feel free to let us know in the section below.