Editor’s Note: If you’ve seen your precious metals dealer advertising “home storage” for your IRA, do not proceed without reading this. You and your dealer could face legal trouble with the IRS.
You may have heard of a home IRA, and it might have sounded like an intriguing option for your retirement portfolio. The main premise of a home IRA is that you can establish an LLC company to store your metals at home (or nearby) for added privacy and control—however, this is in violation of IRS regulations and may conflict with laws allowing tax-advantaged IRA accounts. The Industry Council for Tangible Assets (ICTA) produced a white paper outlining the explicit legal consequences to which those who attempt to either pass off or engage in home IRA storage may be subject. Please read the article and subsequent white paper below to avoid any unnecessary legal penalties.
The following is the Synopsis of the ICTA white paper on home story IRA progams
Investors should be cautioned that investing in a precious metals IRA held in one’s own physical possession (or in a bank safe-deposit box that is not under the custody or control of the bank’s employees) will likely be deemed by the IRS to be a distribution from the IRA in the purchase amount of the bullion resulting in tax consequences and (if under age 59 ½) a 10% early withdrawal penalty.
Further, storing IRA assets in your own home may be considered “self-dealing” and treated by the IRS as a prohibited transaction. A prohibited transaction is treated as a distribution of all assets held in the IRA, i.e., not just the bullion that is stored at home, including distribution of any taxable gain on an asset.
With its recent guidance, the IRS has sent a clear message to the public and, indirectly, to dealers marketing to the public that bullion held in an IRA may not be stored at home. Dealers who continue to advertise home storage may be putting their customers at risk, and their businesses at risk of confronting legal or regulatory action in the future.
See the full repot below:
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