At the moment, there is a big controversy within the precious metals industry about an article which appeared in the Wall Street Journal last year:
…reaffirming the long-held view that keeping gold or other precious metals at home, in your safety deposit box, is illegal after all. (See the screenshot of the website article below, and visit the WSJ site now.)
To give a little background to this, the idea of an IRA (Individual Retirement Account) is to provide you with a tax efficient method of saving for your retirement. The government effectively says to you that they will give you a tax break on your contributions, if you agree to certain conditions – one of which is to keep your invested monies safe until you actually retire and draw it down.
From the government’s perspective, an obvious problem with people keeping any such retirement funds at home, or in another immediately accessible place, is that they might be tempted to withdraw it before they are legally entitled to!
The Taxpayer Relief Act of 1997, introduced by President Clinton, allowed “certain bullion” (carefully defined in the act) to be held in an IRA, in the beneficiaries name…in the custody of a Federally certified depository or vault.
Clever marketing, and even cleverer legal arguments, have led to a spate of people being falsely led to believe the precious metals they are being sold, qualify for the same tax breaks – which are standard with properly organised, and legally funded IRAs.
The problem for the person buying the gold, silver, or precious metal IRA, is that the ultimate responsibility for reporting, and using the tax breaks lies with them. Once the metals are bought, and the paperwork signed, the problem is all theirs.
The difficulty arises when the IRS become involved in all this maneuvering.
At retirement, the Taxpayer Relief Act allowed for the beneficiary to draw down the value of the metals, or to physically take them, to do with as they wished. Whichever option was chosen, it was deemed to be a taxable event by the IRS.
Many unscrupulous gold brokers and bullion dealers have been promoting illegal store-at-home schemes, by convincing the client that setting up a Limited Liability Corporation (LLC) to buy and store the metals on their behalf, is a legal workaround, which enables the client to circumvent the rules.
Unfortunately, the client loses all round. The companies providing such advice charge exhorbitant amounts for this illegal “facility” to be put in place, they usually charge a premium for the precious metal when it is bought, and then walk away, leaving the client open to any resulting fallout.
Check very carefully the credentials and bona fides of the company that you choose to deal with when selecting your precious metals IRA.
If you are looking for a solid, conservative approach to protecting your wealth, a company like Noble Gold will be able to explain to you the legal requirements, contribution limits and the type of bullion or coins which are eligible for inclusion in your IRA – as well as organizing the third-party firewall for you.
Any company telling you that store-at-home schemes are allowable, legal, and IRS approved are lying – pure and simple …