Can I store my IRA gold at home? Is this allowed by the IRS or will doing so land me in trouble? How can I store the IRA gold safely and legally? Today we shall take a look at this interesting topic, in a bid to help you understand how to go about the storage of IRA-approved gold. If this sounds interesting to you, then read on to find out more.
See my Top-5 List of Gold & silver IRA Investment Companies
If you have been thinking about investing in IRA-approved precious metals, and have actively taken part in researching how to go about it, then you may have come across ads promoting “home storage” IRA options.
Such an offer may be enticing, but it is crucial to be careful when interacting with such dealers. In many cases, as you will find out, these are dealers who are not upholding the IRS rules with regards to storage, and working with them could lead to you getting into trouble.
Thing is that the advertisers of home storage gold IRAs come up with very enticing offers that many people find hard to resist. Some even go to the lengths of offering you free safes if you open a gold IRA with them.
Unfortunately, the information presented by the advertisers is either highly misleading or encourages investors to take part in illegal activities. According to the rules set by the IRS, all IRA-approved precious metals must be held in an approved depository.
How do gold IRAs work?
A gold IRA is a special self-directed individual retirement account that allows the investor to buy approved precious metals. The fact that it is called a gold IRA does not mean that you can only use it to invest in gold exclusively. You can also use the account to invest in precious metals such as silver, platinum, and palladium. Investors who own gold IRAs also use them to buy assets in other industries, including real estate and other types of businesses.
To open a gold IRA, you need to liaise with an IRS-approved custodian to get started with the account opening process. The custodian should take care of all the disbursements, record keeping, and reporting activities related to your account.
After opening the gold IRA with your preferred custodian, you can fund it through a rollover process ( or a simple transfer process), from your existing retirement plan. You also have the liberty to fund it through check or wire payments. The IRS has set the maximum annual contribution at $6000 for those aged below 50, and $7000 for those aged above 51 years.
After completing the funding process, you can instruct your custodian to purchase your preferred assets. Your gold and other precious metals need to be then transported to an approved depository that you can visit at any time to view your assets.
***What Can I Invest in With a Self-directed IRA?
What does the Internal Revenue Service (IRS) say about home storage gold Individual Retirement Accounts?
The one to note is that it is not prohibited for an investor to buy gold and hold it in a safe at their home. This can happen provided that the gold is not for the purposes of investment within an IRA structure. You, therefore, have a choice to store your non-IRA gold in any depository or safe that you prefer.
Not all types of precious metals qualify for use in IRA investments. According to section 408(m) of the IRS code, only precious metals that meet the stipulated purity and fineness standards are allowed in gold IRAs. The code further states that upon purchase, the approved precious metals must be held by a trustee.
Investors who would like to add collectible gold are prohibited from doing so by the IRS. Exceptions may be made for certain highly refined bullion that is held in the physical possession of banks and IRS-approved nonbank custodians.
For those who still have questions about the legality of home storage gold IRAs, then it would be a good idea to read the white paper that was released by the Industry Council for Tangible Assets in 2018. The title of the white paper is “The Prohibition of Home Storage of Bullion Held in an IRA.”
What is the penalty for opening a home storage gold IRA?
The IRS is very strict when it comes to the enforcement of the rules that it has already set. Investors who break rules regarding the storage of gold are usually at risk of getting hit with distribution penalties. This is because the IRS views the storage of gold at home as taking a distribution.
Anyone who is below the age of 59.5 years who stores their gold at home must pay a 10% penalty. In addition to that, their assets are longer viewed as tax-deferred, and they have to pay the taxes they owe on their investment. Those taxes are more often than not usually a hefty amount of money.
The storage of IRA-approved gold at home could also potentially lead to an IRA audit. It will not be business as usual for you if the IRS comes across anything fishy in your individual retirement account. In the worst-case scenario, you could actually find your other non-IRA assets being audited. Such audits could translate to more fines and taxes, depending on what the taxman finds.
**Related – Gold IRA Rules and Regulations
Why then, is there a great deal of confusion regarding the storage of IRA gold at home?
The confusion surrounding the storage of precious metals at home mainly results from misleading ads promoting home storage. While it is allowed for you to open an IRA and to oversee most of the transactions yourself (in the case of a check-book Self-Directed IRA), you are still not allowed to purchase and store the gold at home. It has to be securely stored in a depository under the name of your self-directed IRA’s LLC (for the check-book SDIRAs).
Frequently asked questions on “store IRA gold at home”
Why am I not allowed to store my IRA-approved gold at home?
Storing IRA-approved gold at home increases the chances of it getting stolen, and you losing your assets because they are not insured. It also opens up the possibility of rogue investors switching the IRA gold with gold that does not meet the purity and fineness standards. Doing this only complicates the gold IRA investment process, which is unnecessary owing to the act that the gold could simply be stored in a secure depository that the investor can access at any time that they please.
Where can I open a gold IRA the right way?
There are many misleading gold scams and advertisements out there, hence the need for all investors to do their research before establishing a gold IRA account. It is a good idea to compare several options by checking out their reviews, and ascertaining that the company’s reviews and ratings are exceptional before moving forward.
You can start by looking at my #1 recommendation here on this page.
Why do investors store their IRA gold for future use?
There is only a limited supply of gold in circulation around the world. The gold mining and exploration processes are costly, hence producing an “excessive” amount of gold is close to impossible. History has also proven that gold is an asset worth holding on to during periods of high inflation, which makes it very valuable. Financial experts still believe gold is underpriced, and that its price could increase significantly as more people become aware of its benefits.
I have already opened a Home storage gold IRA, what should I do?
If you have already set up a home storage gold IRA, I would recommend that you shut it down right away. You should then contact a custodian to guide you on how to open a gold IRA that’s legally accepted. Holding on to IRA gold using a home storage structure will only lead to the IRS coming after you and hitting you with taxes and penalties.
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That will be all this post on “Can I store my IRA gold at home?”. I hope that you found it informative and you know what to do if someone comes to you wooing you to open a home storage gold IRA. Let me know if you have any questions or concerns regarding today’s topic. You can drop them in the comments section so that I can respond to you ASAP.
I wish you well,
Eric, Investor and Team Member at Gold Retired!
william underwood says
Several years ago I opted to remove my gold and silver (purchased in a rollover from my IRA) and store it at home because of the high cost of storage with the custodian. What should I do now to avoid getting in trouble with the IRS for home storage. I’ve been reading that it is not legal to do home storage.
First of all, thank you for your comment!
Well, you have been reading right, I have read a lot about the same topic lately and it could get one in trouble by doing so. On the other hand, I have seen that certain companies promote it as legal, so there might be exemptions. Like with everything no rule without exemptions, right?
Maybe you could get in contact with a couple of the top- gold IRA companies and ask their experts, because from what I know none of them offer or promote home storage: https://goldretired.com/best-gold-ira-companies-top-5-list-additional-resources
You can also call directly and talk to Harvard trained economists working at Augusta for example on this nr: 855-976-3593
Please feel free to come back here and share what they told you about this subject!
Thank you again for your comment!