We are living in uncertain economic times, so we’re not surprised that we are often asked this question: can I put gold in my IRA and store it at home?
Throughout history, gold has always served as a safe haven investment. When there’s a perceived vulnerability or uncertainty in the economy, gold gains strength as more people turn to it to hedge their investments.
Our answer to the question of whether or not you can put gold in your IRA and store it at home, is two-fold. First, we want to tackle the subject of putting gold in an IRA. Then we shall answer the question about storing gold at home.
Precious Metals IRA
You can definitely put gold in an IRA, as stated in the Taxpayer Relief Act of 1997. The Act also lists the types of gold and other precious metal assets that are eligible as IRA investments.
Gold may be added to a Precious Metals IRA–the only IRA type that allows investors to hold physical gold, silver and other precious metals. There are several rules you need to comply with, including the following:
Each time you direct your custodian to purchase an asset for your IRA, you will be charged with the corresponding administrative fees.
And storing your gold outside IRS-approved facilities can result in hefty fines and penalties.
Putting gold in an IRA and storing at home
Understandably, you want to avoid paying fees for every IRA transaction you make. And if you’re like many investors around the country, you will also feel better if you can keep your gold assets at home or somewhere nearby.
Many IRA services offer an alternative to address these concerns: private storage IRA, also known as home storage IRA, private gold IRA, checkbook IRA, and others.
A private storage IRA is a self-directed IRA that you can open with any IRS-approved entity. Once this is in place, you need to open an LLC, or a Limited Liability Company, and name yourself as president or manager of the company.
You can then instruct your self-directed IRA to invest in the LLC, which then buys your IRA investments using your IRA funds. Under this arrangement, your IRA assets are owned by the LLC, which is considered a separate and independent entity from you. The LLC may choose where to store your gold assets, including a vault in your own home.
By opening a private storage IRA, therefore, you can put gold in your IRA and store it at home.
Advantages of a private storage IRA
When you want to make an investment through your LLC, you simply have to write a check for it. There’s no need to direct your IRA custodian to do the purchase for you. This not only saves you a lot of time and effort, but also the fees that you would otherwise pay your IRA custodian. It also allows you greater freedom in choosing and managing your investments, including putting gold in your IRA and storing it at home.
Risks of a private storage IRA
It’s apparent that the “backdoor approach” to putting gold in your IRA and storing it at home is open to risks. The IRS is undeniably aware of what’s going on, and may be expected to take steps in the future to regulate, if not altogether disallow, this kind of arrangement.