If you have a self managed IRA account, then you are likely already aware that you can make investments in gold, silver and other precious metals with your IRA funds. As more companies are promoting the idea that precious metals can be stored at home with an IRA LLC or in a local safe box, we’d like you to know the difference between storing precious Metals at a Depository via an IRA provider and storing valuable metals at your home with an IRA LLC. Visit our website and learn more about gold and silver IRA custodians.
Home storage is not an option for everyone. Companies that endorse it don’t always give the full story about the risks and benefits. These companies can refer you for legal advice.
This is a comparison to help you understand what at-home storage means for precious metals storage.
* Each year, the IRS will be notified by email that your IRA controls the LLC.
* There are few metal investment options. All metals except US-minted Eagles cannot be invested in.
* The IRA provider must be provided with third-party confirmation by the LLC owner of its value including any metals and cash.
* Insurance on home-stored metallics is not affordable at any price.
* Storage of safe deposit boxes is not insured by banks. (ex: $100K = $200/yr $50K = $110, $20K = $75)
* The metals do not belong to you. For example, you could pledge the metals in exchange for a personal or business loan.
* For the IRS to report distributions made of metals, or other assets by an LLC, the IRA provider must first be notified.
* It may be illegal to give storage space to the LLC assets at your residence in your personal safe or in your private back yard.
* The LLC must maintain a business bank account, which could have monthly fees.
* Bank safe deposit boxes can be purchased for between $15 and $65 per calendar year. Keep in mind that silver Eagles require more space for every $.
* The annual fees charged by IRA providers for LLCs can be higher than for direct ownership of metals.
* The IRA owners must maintain the LLC’s bookkeeping.
* Annual reporting and fees for state filing may be required for an LLC.
* The legal fees and setup of the LLC are required.
* If IRS asserts that a prohibited operation occurred, taxpayers bear the burden to prove that the IRA holder has not received a personal advantage. Tax court presumes that you are guilty unless you prove otherwise.
* Personally-owned metals can be subject to higher levels of due diligence because buyers don’t have documentation of “chains” of possession. This is to ensure that the metals haven’t been altered.
IRA Direct Ownership
* Your IRA provider may not inform the IRS that your IRA contains metals.
* You are allowed to invest in any permissible metal.
* You have the option to choose from a list of holding metals-specialized depository companies.
* You may distribute the metals or sell them at any time.
* The IRA provider automatically confirms the value every year.
* Insurance is included with the deposit fee for metals.
* It is practically impossible that you could be involved in a prohibited transaction.
* IRA provider charges include bank accounts and bookkeeping.
* IRA providers often charge less for metals than any other asset.
* Depositories are available for either item storage or commingled storage.
* No reporting from the state is required.
* There are no LLC formation fees or legal fees.
* An IRA may be established quickly and available for purchase.
It might seem tempting to keep your IRA’s precious metallic on your kitchen countertop, but many of our clients find that holding the metals in the hands of a professional administrator provides a safer option.
Multiple factors are involved in making the right investment decision for many strategies. Understanding the IRS rules is key to making informed IRA investment choices.