Investing in a self-directed IRA can be a risky endeavor. That is especially true if you do not have proper guidance.
One couple in Utah did something that the IRS does not permit – they stored their IRA gold at home. Their mistake led to taxes of nearly 270000 on about 730000 of their IRA assets plus penalties that could exceed 50000.
The McNultys’ Story
During the Great Recession, many Americans turned to gold and silver. They did so for the peace of mind that comes from owning precious metals.
However, they also knew that investing in these esoteric assets could be a risky venture. One of the risks is that these types of investments are often hard to track and can be difficult to access for your heirs if something happens to you.
As a result, many investors fall prey to bad dealers who promise a lot but deliver nothing. This is particularly true of home storage gold IRAs.
These types of home IRAs are a big no-no for investors. They’re a violation of federal law and could lead to the IRS seizing your gold.
How They Got in Trouble
A couple in Rhode Island got into trouble with the IRS after storing ira gold at home. They are now owing more than 300000 for the lack of knowledge about a very significant detail in the gold IRA-investment process.
They learned the hard way that owners of individual retirement accounts with assets invested in gold and silver coins cant store those metals at home.
The couple was caught out in their annual audit by the IRS. The McNultys were ordered to pay $270,000 on about $730,000 of IRA assets, along with penalties that are expected to exceed $50,000.
There are many firms that offer a service that allows you to keep your IRA gold in a safe deposit box. These companies try to convince you that they have clever solutions that will distract the IRS from hunting down your IRA gold.
The IRS’s Response
By Laura Saunders, The Wall Street Journal Friday December 3 2021
A couple in Rhode Island learned the hard way that storing gold and silver coins inside your home can get you into trouble with the IRS. That is the case with Andrew and Donna McNulty who deposited $411,000 worth of gold and silver American Eagle coins in their home safes.
This was in violation of the Internal Revenue Code which prohibits IRA owners from holding physical precious metals at home or in a secure depository like a safe deposit box.
The IRS’s response to the McNultys’ storage of ira gold was severe. They ordered them to pay $270,000 in taxes on about $730,000 of IRA assets, plus penalties that will likely exceed $50,000.
What You Can Do
A couple in Rhode Island has been caught up in a tax scam after they stored their ira gold at home. They are now owing the IRS more than 300000.
While IRA gold is a great investment it can be dangerous to store it in your home without proper guidance. Its best to store it in an LLC or safety deposit box.
You can help the McNultys by finding a reliable precious metals dealer. Make sure to do your research before deciding on a company.
Many companies advertise that you can use your IRA to purchase gold and other precious metals. They often tell you that they will handle the purchase and storage for you. However, you should never rely on these companies for investment advice.