You may already be aware of your potential to invest in precious metals through your self-directed IRA accounts. As more companies encourage the storage of gold and silver at home, or in a safe deposit container, we want to highlight the differences. You can get the best guide on top rated gold IRA.
Companies that advocate home storage do not always present the full picture of the benefits, risks, and rules. These companies may refer you to your personal legal counsel for guidance.
This comparison aims to give you the necessary information to make an informed decision regarding your precious metals IRA.
IRA/LLC program:
* Annual notification to the IRS that your IRA has purchased the LLC.
* Metals investments options are severely restricted. Metals other than US-minted Eagles are not available.
* The IRA Owner must provide the IRA Provider with third party confirmation that the LLC is worth the money, including any metals or cash.
* Home stored metals insurance cannot be purchased at any reasonable rate.
* The bank does not insure safe deposit box storage. (ex: $100K = $200/yr $50K = $110, $20K = $75)
* The metals belong to your IRA, not to yourself. Therefore, you should avoid any prohibited transactions. Otherwise, your IRA may be at risk. One example would be to pledge the metals for personal loans or to take ownership of the materials directly.
* To report to the IRS, distributions of metals or other assets made by the LLC must be first reported to the IRA provider.
* It may be prohibited to provide storage space in your personal home for LLC assets, or in your personal safe in your backyard.
* The LLC should have a business account that may charge monthly fees.
* Bank safe deposit box costs between $15 and $65 per annum or more. Keep in mind, silver eagles take up much more space per $.
* The annual fees paid by IRA providers to LLCs are more expensive than those charged for direct metals ownership.
* The IRA Owner must maintain bookkeeping for the LLC.
* The LLC may require annual reporting and payment of state filing fees.
* A legal fee and set-up of an LLC are required.
* If the IRS alleges that a prohibited transactions occurred, the taxpayer bears the burden of proof to show that the IRA holder was not deprived of any personal benefits. Tax court will presume that you are guilty until you prove otherwise.
* Personally-owned metals may be more difficult to sell because of lack of documentation that “chain of ownership” exists. This will ensure that the metals were not altered.
IRA Ownership Direct:
* The IRA provider is not required to notify the IRS about metals owned by your IRA.
* You can purchase any metal that is allowed.
* You can choose from a number of depository organizations that specialize on holding metals.
* You can take distribution or sell the metals at anytime.
* Annual confirmation of the value is not required by the IRA provider. It is done automatically.
* All metals must be insured.
* It is almost impossible for you to be involved in a prohibited trade.
* IRA provider fee includes bookkeeping and banking accounts.
* IRA providers typically charge metals at lower annual IRA fees than any other asset.
* Depositories provide storage for specific items or commingled storage.
* State reporting is not required.
* No legal fees or setup fees are required.
* An IRA is possible and can be setup quickly to allow you to purchase a property much quicker.
Although it may sound tempting to place your IRA’s precious metal on your kitchen table, most of our clients recognize that holding your IRA’s metals with a professional administrator offers a lower risk, lower stress and less hassle.
When making the best investment strategy decision, there are many factors at play. For informed IRA investment decisions, it is essential to understand the IRS rules and regulations.
