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The “Home Storage” Precious Metals IRA Myth
In early 2017, the Texas Attorney General issued the following gold coin consumer alert “Be wary of Home Storage IRA Plans, as these have not been thoroughly tested with the U. S. Treasury or IRS. Stick with reputable independent custodians.”
The internet is full of websites promoting “Home Storage” Gold IRAs, “Self Storage” Gold IRAs, “Home Delivery” Gold IRAs, and other enticing captions that lead consumers to believe current law allows them to store gold and silver held in their IRAs at home.
Unfortunately, these claims are not supported by the Internal Revenue Code. Storing coins purchased for an IRA account at your home is likely a violation of the Internal Revenue Code.
“An individual retirement account means a trust created or organized in the United States for the exclusive benefit of an individual or his beneficiaries, but only if the written governing instrument creating the trust meets the following requirements:
The trustee is a bank or other such person who demonstrates to the satisfaction of the Secretary that the manner in which such other person will administer the trust will be consistent with the requirements of this section; Internal Revenue Code §408(a)(2).
We are not aware of and it is hard to imagine a situation where the Secretary of Treasury and the Internal Revenue Service would approve an individual acting as a trustee for their own Precious Metals IRA. It is even harder to imagine the IRS approving a person’s home as a storage facility.
If the United States government intended to allow individuals to act as custodians or trustees of their own retirement savings this could have been easily accomplished. However, this was not demonstrated in the Internal Revenue Code.
An IRS audit of a taxpayer storing their Precious Metals IRA assets at home may result in the consumer paying federal income tax on all of the assets as well as a penalty of 10% if the consumer is under age 59 ½ .
Consequently, I recommend our customers utilize an established custodian/financial institution that specializes in holding precious metals for IRAs in compliance with the IRS requirements.