Home storage gold IRA ads lure investors with promises of easy access and complete control over their investment, but such advertisements often prove misleading or even in violation of IRS regulations.
Storing gold owned by your IRA at home is against the rules and could incur serious fines; furthermore, it can be hard to protect it from theft at home.
Taxes
Setting up home storage gold IRAs can be complicated and come with severe penalties if anyone violates the rules. Advocates of such accounts tend to overlook the difficulties involved with meeting IRS qualifications as well as their expense; in fact, the IRS requires that an approved custodian act as trustee instead of acting themselves.
Companies offering home storage gold IRAs typically charge setup, wire, and annual maintenance fees that can total several hundred dollars; additionally they may charge a monthly storage fee to keep your IRA gold in their vaults.
Gold stored at home can be considered a distribution, which carries with it a 10% penalty if you are under age 59.5 and must also pay income taxes on it. Furthermore, an IRS audit could result in further fines or penalties being levied against your IRA account.
Investment strategy
Home storage gold IRAs are popular investments that give investors control and accessibility, yet don’t come without risks. Noncompliance with IRS regulations could result in severe penalties such as disqualification of an IRA and immediate taxation; furthermore, theft risks increase considerably, making these an inferior alternative to traditional gold IRAs.
To establish a home storage gold IRA, it’s necessary to find a company that will establish an LLC on your behalf and appoint you as the manager. Some such firms even recommend creating false fronts like renting out safe deposit boxes to store assets within your IRA – though such moves won’t fool the IRS!
Additionally, selecting a trustworthy custodian or trustee for your IRA is vital to ensure its legality and compliance with IRS regulations, helping avoid penalties if audited by them, scams and other problems which might threaten retirement savings.
Legal risks
Keep in mind that having physical gold in your home can result in penalties, fees and taxes that you might otherwise avoid. For instance, the IRS could consider it as a distribution and charge you with a 10% penalty if you’re under age 59.5; they might also impose income tax and make it no longer eligible for deferral; furthermore they have broad discretion to investigate home storage gold IRAs at any time.
Home storage gold IRA providers often fail to mention that this practice violates IRS rules and is illegal. Instead, investors should open a self-directed IRA with a company specializing in precious metals that can offer guidance from both front- and back-end.
These companies can assist in opening an IRA with checkbook-style management, which enables you to invest in any collectible such as gold and other precious metals without incurring regulation-induced restrictions. While traditional IRAs do require custodianship services for safekeeping purposes, checkbook-style IRAs do not.
Theft
Although home storage gold IRAs might seem like an appealing idea, they’re actually not safe ways to invest in precious metals. Home storage falls outside the law and could incur costly penalties from the IRS – as per their requirement that IRA-purchased gold be kept at a depository approved by them rather than being kept at home.
Not only can storing precious metals at home expose you to legal risks, but storing your metals there could expose you to theft and other issues as well as price fluctuations resulting in substantial losses if kept at home.
Gold IRAs may use deceptive advertising techniques to draw in investors. One advertisement featured what appeared to be an entire safe filled with gold bars. Such misleading statements could even encourage illegal activity; it may be difficult to substantiate claims in these ads, so selecting an established custodian or trustee for your IRA is essential for its safety and protection.
