Gold IRAs provide unique investment opportunities and serve as an inflation hedge, but as demonstrated in a recent Tax Court case, investors must adhere to specific rules when buying physical gold for an IRA.
Coins eligible for inclusion in an IRA must meet IRS standards for fineness and purity, and be produced by an accredited refiner or assayer. Investors should also be wary of dealers that charge hidden one-time fees or high commissions when selling coins in an IRA.
Investing in Gold
Gold has long been seen as an asset that provides protection from economic turmoil and inflation; however, investors should assess all associated risks and fees before making their final investment decision.
Gold coins to qualify as IRA-approved must meet rigorous purity requirements to qualify. Eligible bullion bars and coins must have a fineness of at least.995; rare and collectible coins must also meet IRS guidelines.
Investors should avoid precious metals dealers that do not provide comprehensive services for the benefit of their customers. Such dealers tend to act more like salespeople who receive commission on sales rather than fulfilling any sort of fiduciary duty to their clients.
If you are interested in investing in gold, consider opening a self-directed Individual Retirement Account (IRA). Both Traditional and Roth IRAs allow investors to hold physical gold alongside other precious metals; or opt for a SEP IRA which offers higher contribution limits based on income.
Taxes
Purchasing physical gold for an Individual Retirement Account (IRA) requires careful attention to ensure compliance with IRS regulations. Your gold must meet purity and type standards as well as be stored safely to prevent theft. Adding precious metals as investments into an IRA portfolio can provide diversification that helps reduce risk while increasing returns.
An IRA portfolio that is well diversified can offer protection from inflation, economic uncertainty and currency crises. Before investing, however, it is wise to consult a tax professional who specializes in precious metals IRAs for advice.
Gold investments are subject to collectible tax rates of 28% on long-term capital gains. Losses accrue before capital gains and so it is crucial that proper planning and record keeping be conducted to reduce your tax liabilities as effectively as possible. Selecting an account type suitable for your investment portfolio is also vitally important.
Security
Before investing in gold via an IRA, take time to consider its impact on your overall retirement goals. There are many companies that provide approved IRA gold investments; however, some charge excessive fees or do not comply with regulatory standards.
To maintain their tax-advantaged status, precious metals stored within an IRA must be kept at an institution that adheres to stringent security standards and IRS guidelines; additionally, owners are not able to take physical possession of the gold themselves.
As you search for an IRA custodian that offers gold investments, be sure to consider both ratings and educational resources when making your selection. Rosland Capital holds an A+ Better Business Bureau rating, providing new investors with a free Gold IRA kit featuring six steps on how to invest. American Hartford Gold on the other hand has lower BBB ratings with limited educational materials; regardless of which company you decide upon be sure to compare one-time and monthly fees before making a final decision.
Storage
Gold is an investment worth safeguarding, so its secure storage is paramount for protecting its value. Unfortunately, home storage options expose precious metals to theft and natural disaster risks; luckily IRA-approved depository facilities offer valuable protection from such risks.
Although the IRS doesn’t explicitly prohibit investing in collectibles via an IRA, they do stipulate specific guidelines. This includes adhering to IRS regulations and purchasing coins which meet purity standards; moreover, your coins must be stored with an approved depository rather than being kept at home.
Companies that provide IRA-eligible precious metals typically employ experts who can guide investors through the complex nature of this investment vehicle. They can suggest reliable custodians and assist in selecting and purchasing IRS-approved gold. Once your transaction is complete, they can arrange to have it shipped and stored safely at an approved depository, ensuring full compliance with IRA regulations while preventing penalties for noncompliance.
