Investing in gold is a great way to diversify your retirement portfolio and protect your savings from inflation. But if you're considering a self-directed IRA, you may be wondering if you can store the gold at home. Unfortunately, the answer is no. The IRS has ruled that gold and other precious metals must be stored in a safe deposit box or other approved facility in the name of the LLC.
Home storage IRAs are not a safe way to invest for retirement. The IRS has made it clear that gold and other precious metals owned by an IRA must be stored in an approved facility. This means that you cannot store IRA-eligible gold at home or in a local safe deposit box. The IRS statement against home storage is an important fact that all self-directed IRA investors who own precious metals should be aware of.
Keep in mind that there are two rules that apply to precious metals that are owned by an IRA. First, precious metals owned by an IRA must qualify under IRC § 408 (m). This means that only certain coins (e.g. American Eagles) and gold, silver, platinum, or palladium that meet certain fineness requirements are allowed.
In addition, the IRS requires that the gold must be stored in a safe deposit box or other approved facility in the name of the LLC. This means that even if you set up an LLC to control your IRA purchases, you still can't store the gold in your home. For a detailed legal analysis, please refer to our white paper on the subject found at the following link. Golden Anger Advocates for Home Storage Try to Convince You They Have Smart Solutions to Get IRS Attention.
You are not allowed to act as the trustee of your gold IRA for home storage until, what if, the IRS approves your application. Unlike withdrawing funds from a traditional retirement account, a gold-backed IRA allows you to leave with a powerful physical asset in hand with gold that you can hold, sell at a later time, use as currency at a time of crisis, or pass on to family members. However, American Eagle Bullion gold coins are the only gold coins that are an exception to purity guidelines. If you keep precious metals at home that are included in a self-directed IRA, the IRS is likely to treat them as a taxable IRA distribution. Even a home storage IRA is just an indirect way to invest in your LLC rather than the gold itself. However, there is a loophole (see Internal Revenue Code, Section 408 (m)) in the collectibles ban: You are allowed to collect certain forms of gold, silver, platinum and palladium in a self-directed precious metal IRA (commonly called a gold IRA). Once you are 59 and a half years old, you can liquidate the precious metals in your self-directed IRA for cash or take physical possession of your gold and silver without penalty. However, unlike self-directed IRAs managed through a qualified custodian, home storage IRAs assume that the account owner is totally self-sufficient in managing their investments.
But the fact that even pro-gold investment companies think that a gold IRA for storage in the home is illegal should give it pause. Although the rules surrounding retirement accounts and gold IRAs may seem confusing, it's not too late to open your own self-directed precious metal IRA. With proper guidance and understanding of the regulations, you can enjoy all of the benefits of investing in gold without having to worry about storing it at home.