What Do You Need To Know About A Home Storage Gold IRA?

Thanks to 1998's taxpayer relief act, the idea of having more diverse kinds of IRA assets meant that taxpayers could broaden their horizons and try new ideas and ways to invest in their futures.

Alongside customary paper-based financial elements, the idea of IRA gold and other precious metals became a reality. With that in place, people could design retirement strategies around physical precious metals, enlisting the best gold IRA companies to assist them on their journey.

With this came the idea of home storage IRAs. While the concept is not new, the conditions and risks it comes with meant that people would be skeptical of going this route.

Could you invest in physical gold in this way? Allow the information below to clear up any misconceptions you may have as you learn what it entails and what you can do.

Before we delve into this “red hot” topic, (thanks to the banks failing), there is one company that can help you set up a home storage physical metals IRA, which they call a “home delivery gold IRA.” That company is Red Rock Secured, and you can learn more by having a free consultation.

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Understanding Precious Metals IRAs

Before going into the home storage gold IRA principles, here's a quick rundown of what a gold IRA account is.

You may find these also being called precious metals IRAs because they will often allow you to store other metals such as silver coins, platinum, or palladium.

They are very much like your standard, Roth, or SERP IRA, with the difference being the fact that the backing assets will be precious metals. As far as tax rules and other elements go, they are pretty much identical.

The Deterrent to Opening a Home Storage Precious Metals IRA

Even if you would open a gold IRA with IRS-approved gold bullion, there would be a requirement to have the physical gold stored in a secure depository location.

Naturally, people would find the idea of a home storage gold IRA attractive, but the detractor would always be the steep requirements and the possible penalties you may face for a failure to comply with the stipulations laid out.

Even as attractive as advertisements from reputable gold IRA companies may make them sound, you'll want to take a step back and do your research before going in that direction with your retirement funds.

Storing IRA gold is not the same kind of situation as traditional investment vehicles. Take bonds, for example. If you have the means, you could simply have a safe or vault set up at home.

The papers involved could be stored there and left for as long as you desire. Sure, there may be a few technicalities involved in the process but it's nothing you can't wrap your head around.

If you have a 401k setup, the idea in terms of difficulty is also not too far fetched. Sure, account managers take cuts from your holdings and there will be heavy taxation when things mature, but getting the ball rolling doesn't feel like too much of a tall task.

Typical Qualifications You May Need for Gold IRA Companies to Oblige You

So now you have an idea of why things are the way they are when the idea of a home storage gold IRA comes into discussion. This is a good time to give you a rundown of the kinds of requirements you're facing for these IRA accounts.

In any situation where you have not demonstrated compliance with the requirements, the purchase of the precious metals will simply be viewed as a taxable deduction. The minimum standards for a home storage gold IRA are:

1. Using a specially written operating agreement, you must have set up a limited liability company (LLC) in your name.
2. Any trustees or employees of the company need to ante up corporate insurance in the form of a $250,000 fidelity bond.
3. Your minimum net worth following audits and incorporation must be no less than $250,000.
4. The trustee corporation must have an ownership structure that sees it being divided among several people.
5. A qualified public accountant must be leaned on for an annual detailed audit.
6. There must be a qualified corporate legal counsel that's on a retainer.
7. Applicants are required to have experience handling retirement funds and must demonstrate a "reputable financial background" backed by verifiable fiduciary experience

With all of this, you can see that the choice to store IRA gold at home means that your odds of being audited go up and it's not too hard for the IRS to decide that your arrangement does not qualify. If that should happen, then whatever tax-deferred status your precious metals had will be lost.

When that happens, you are taxed immediately and that happens at whatever the applicable tax rates at the time would be.

The Legalities of Home Storage Gold IRAs

Whenever the conversation surrounds paper assets such as cash, there usually isn't too much of a question. Cross into the waters of precious metals, however, and the queries will begin to come. It almost immediately feels illegal to store physical gold in your home.

This is a matter of perception. Sure, gold IRA assets are not allowed to be held in the absence of a legitimate custodian. However, this doesn't mean that individual custody is a crime.

The idea of an IRA account is much more positive than you may think. The fact that you have one is a restatement to the kind of relationship between you as an account holder and the IRS. Whether it's income taxes or other kinds of taxation, people will try to get breaks and benefits where they can.

So, the fact that you can have this account that is characterized by tax advantages is usually a huge plus!

There's nothing illegal about storing IRA gold at home. However, if you should wish to do so, you need to meet the requirements that have been established. A failure to do so is where the problem lies. In a lot of cases, you may find yourself having to pay steep fines. We recommend talking to a Red Rock specialist to ensure you follow the correct process.

Is a Home Storage Gold IRA a Risky Proposition? A Story from the Past

So, there has already been talk about what happens with the self-directed IRA if the IRS should do an audit and determine that you don't have all the required affairs in order.

There is a case in history known as that of Andrew and Donna McNulty, which is the perfect example for this kind of discussion. An audit was done and the two were said to have violated the applicable IRS rules. In 2019, the couple decided to go to court with their issue.

Through their LLC, the McNultys had bought coins and they took physical possession of them. According to the IRS, some taxable distributions had not been reported properly.

It would not be until 2021 that the matter would be decided. The ruling was in the IRS' favor and it required the couple to pay over $300,000. Bear in mind that this precious metals IRA only had a value of $730,000.

Without the relevant boxes checked, such a risk is only a part of what you need to keep in mind. There hasn't even been talk of the fact that civil and criminal penalties can stack up too!

What Kind of Penalties Could You Face if Your Home Storage Gold IRA Wasn't Properly Opened?

At this point, you know that a home storage gold IRA is not prohibited by any stretch of the imagination. The real challenge is being able to hit all the requirements needed to open them. So, what kind of penalties are you realistically looking at here if you decide to go ahead with one?

First, there are distribution penalties. In this case, the IRS will treat the home storage as a distribution. Typically a distribution is a withdrawal made from an IRA account. While you are allowed to take distributions from a gold IRA, you can't do so before turning 59 1/2 without encountering a 10% tax penalty.

It gets worse. Remember the tax advantages that made you look to a gold IRA in the first place? You'll be losing them too. Therefore, you will begin to deal with the application of income tax to your distributions.

Of course, the impact of these depends on the gold IRA investments themselves. Based on how large or small yours is, you stand to lose quite a bit.

Apart from this, there's the matter of IRS audits. The moment they find out that you are holding precious metals and not doing so in an approved institution, there is likely an audit headed your way.

This audit will be checking out your situation against every applicable rule in the book. Depending on your circumstances, you may violate other rules and these can lead to other fines and penalties.

Bear in mind that there are civil and criminal elements to the whole thing, meaning the possibility of prison time is a very realistic one.

Choosing a Gold IRA Company to Work with for Your Self-directed IRA

Even when you think about a standard IRA, there is always the matter of which firm to partner with. Everyone wants to know the best gold IRA companies out there. You may hear names such as Red Rock Secured, Augusta Precious Metals, or Goldco being thrown around. How do you make your choice? Here are a few of the main considerations:

1. You need to lead with the particular service that you are looking for. Sure, you want to open a retirement account backed by precious metals. In this case, you're probably looking for home storage gold IRAs. In this case, you may want to favor Red Rock Secured considering it has found a way around the tedious and scary process described above.
2. Another thing to think about is the difficulty associated with the experience. Any solid company that deals in gold IRAs will give you a rundown of what to expect with the process. At that point, you get to decide if what you're hearing will work for you or not. If it doesn't sound understandable, it's probably going to be a pain.
3. The reputation of gold IRA providers is also something else to bear in mind. What do accreditation platforms such as the BBB and the BCA have to say? Have you checked Google Reviews, Trustpilot, or Yahoo! Finance? Are there accreditations present that you can validate?

A home storage IRA is not the kind of investment you don't think twice about. You need to know that whichever company you're working with is one that you can have some level of confidence in.

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The Red Rock Secured Home Storage Gold IRA Reviews

As indicated before, you will not find a better home storage gold IRA option than Red Rock Secured. A part of that comes from reputation, reviews, and overall customer support, but the other part of it is having found a way for clients to enjoy the benefits of the account without the need to incessantly worry about the laundry list of compliance requirements.

So, what would it look like for you to have one of these gold IRAs set up?

Setup the Retirement Account

This is the standard step that you will use when you go the route of depository IRAs. A new special account must be opened and it must legally be able to hold non-traditional assets such as precious metals. With that in place, feel free to roll over assets from your existing IRA without the worry of fees or tax penalties.

Create an LLC

If you want to be able to store IRA gold outside of a depository, this step is non-negotiable. The idea is that the LLC will assume legal ownership of the precious metals. It can be set up to store IRA gold at a facility approved by the IRS such as a bank's safety deposit box.

The standard gold IRA is prohibited from going that route as there must be a depository. Thankfully, the final piece of the puzzle takes care of that little problem.

Purchase Gold and Other Precious Metals

Buy the precious metals needed for your home storage gold IRA. Once you do that, you can accept the delivery at home and store them however you see fit. Remember that the IRA only needs documentation of assets inside the IRA, so your precious metal investments remain private.

From the IRS's point of view, there is an investment in your LLC. The underlying metals held by the LLC remain unseen in all of this.

Wrapping Up: Open Your Home Storage Gold IRA Account with Red Sock Secured Today!

Completing IRA purchases of gold and silver coins would usually mean going the route of a depository. However, if you don't want to do that, take advantage of a home storage gold IRA with Red Rock Secured!

Frequently Asked Questions

Do IRS Rules Make a Home Storage Gold IRA Illegal?

The only illegal thing is going the traditional home storage gold IRA route and choosing not to adhere to the requirements that the IRS has laid out. This could mean fines and penalties that no one wants to deal with.

Can I Store My Gold at Home?

Storing your gold coins and bars at home is a non-issue if you meet the legal requirements associated with a home storage IRA. Alternatively, you can simply work with Red Rock Secured and go around the tedious process entirely.

Is a Gold IRA Worth It?

Whether home storage gold IRAs or regular gold IRAs, you're buying into an investment vehicle with a value that's independent of Fiat currencies. Sure, you shouldn't make your entire investment portfolio a gold IRA, but the value benefits are worth it!

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Disclaimer: The above is a sponsored post, the views expressed are those of the sponsor/author and do not represent the stand and views of Outlook Editorial.