Can You Take Possession of Precious Metals in an IRA?
Many individuals use gold and silver coins as part of their retirement portfolio diversification strategy, but according to IRS regulations they cannot own collectibles such as gold coins and bullion in an Individual Retirement Account (IRA).
There are ways around this rule with a self-directed IRA; we will discuss how and what restrictions may be in effect in this article.
IRA Custodians
Custodians for Individual Retirement Accounts are financial institutions such as banks, trust companies, credit unions or savings and loan associations approved by the IRS to provide asset custody services. If you opt for either an SDIRA or traditional gold IRA, your custodian will facilitate your purchase and deposit them safely into a depository account; additionally they should offer dedicated precious metal specialists available for online or telephone enquiries regarding your purchase or depositing precious metals into an IRA account.
When taking physical possession of precious metal investments, the IRS considers this distribution and taxes it accordingly. Therefore, a custodian must arrange to have them shipped directly to a depositary while keeping track of where it resides.
Custodians for individual retirement accounts often specialize in certain investments, and selecting an IRA custodian that best meets your needs can help minimize fees that sap gains. Ask any prospective custodian to describe their fees schedule and the assets they can store; for example STRATA can store traditional, alternative and non-exchange traded investments and is an ideal solution for precious metal IRAs.
IRA Storage Options
Holding precious metals at home when investing in an IRA can be problematic. According to IRS rules governing IRAs, all precious metals owned by the account should be safely and separately stored from other assets in an approved depository. Anyone breaking these regulations by keeping IRA-purchased metals at home are subject to distribution penalties which require them to pay income tax before reaching retirement age.
Professional storage options exist that provide secure and safekeeping at an economical price for metals owned in an IRA, in accordance with IRS regulations. Options vary from home storage, bank vaults or private vaults that specialize in precious metal storage. When selecting an IRA custodian it’s essential that your budget and objectives are taken into consideration so as to find one which meets both.
IRA Loan Lenders
For optimal success when investing in physical precious metals, it is advisable to work with a company offering both IRA custodian services and metals dealers. A custodian will purchase metals on your behalf before securely storing them at an approved depository facility.
A good IRA custodian can ensure that purchases and storage comply with IRS regulations, while also helping select specific metals for your IRA. Established custodians usually provide their clients with a list of gold dealers they recommend as part of self-directed IRA services.
Investors looking for an easier alternative can look into metals-backed loans as an option for liquidity within their IRAs. While these private lending arrangements provide liquidity sources, there are risks involved as the IRS prohibits lending money directly to disqualified people or entities and penalties may apply if your IRA serves as collateral for such a loan.
IRA Physical Possession
According to IRS regulations, precious metals purchased with an IRA cannot remain in your personal possession at any time; rather, you must place them with an authorized custodian or depository for storage purposes.
In order to avoid incurring taxes and penalties from mishandling an IRA precious metals investment, choose a trusted gold IRA company with proven experience in IRA precious metal investments.
Your gold IRA should be safely stored and easily accessible when needed, which requires selecting a company with both allocated storage options as well as combined ones. Also be sure that they possess appropriate accreditations, licenses and insurance protection to guarantee safekeeping of your investment. You should then have peace of mind knowing your gold IRA is safely tucked away until it comes time for accessing.
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