Can an LLC Own Precious Metals?
Many IRA holders are being convinced by facilitators and precious metal dealers that setting up an LLC with their IRA to purchase precious metals and store them at home is an advantageous move, since an LLC provides tax benefits through flow-through. They claim they won’t pay additional taxes.
Title to the Metals
Precious metals make an excellent asset class to diversify and protect a retirement portfolio against inflation and economic volatility, yet are difficult to store, vulnerable to theft and subject to capital gains tax upon sale. However, they come at a premium.
Many Self-Directed IRA owners opt to form an LLC and purchase precious metals through it to ensure a clear chain of title, and provide additional asset protection.
An LLC owned IRA also makes purchasing precious metals easier without incurring excessive custodian fees. Reputable precious metal dealers will use an LLC as the owner of record for purchases and storage; any potential creditors would need to hire an attorney licensed in Wyoming before going after your assets through this route, which could prove costly in terms of time and legal fees – with Clear Title Accounts from Strategic Gold, your assets never touch LLCs!
Precious metals offer diversification against inflation, economic instability and other risks; yet they are volatile investments with rapid value declines. Selling precious metals triggers capital gains taxes just like any property or stock sale; rolling over an IRA into an LLC so you can buy and store precious metals at home may trigger negligence penalties from the IRS.
To avoid this situation, some companies suggest creating an LLC to hold your precious metals before storing them safely at home or elsewhere. This allegedly protects IRA investments from creditors since judgment creditors can only file charging orders against the LLC itself and seize only any monies distributed by it – however an opinion letter from a qualified tax and legal professional should be obtained prior to starting this plan.
When it comes to investing, many find precious metals more advantageous than stocks or other investments. Being tangible assets that you can hold in your hands, store in your home, take with you or pass down through generations is appealing; furthermore they can easily be converted into currency at any given moment.
Precious metals can serve as an economic safety net in times of uncertainty, with their value often increasing as fiat currencies decline in value.
Tax treatment of precious metals investments can vary significantly from that of other investments, depending on your circumstances. When selling metals, capital gains taxes may apply and this tax depends on your cost basis in them; which includes both their original purchase price plus expenses associated with holding and maintaining them – such as appraisal costs.
Recent promotions by some dealers touting something known as a “home storage LLC.” This innovation purportedly allows precious metals investors to sidestep IRA rules regarding third party possession, specifically any purchase or possession by an IRA account holder in their own name; such rules aim to prevent individuals using retirement funds for personal gain.
Problematic with this approach is complying with IRS requirements that IRA assets be stored with a third-party; further, this advice has been explicitly issued against keeping physical precious metals stored at home.
Investment of your precious metals into a Wyoming LLC is often seen as the wiser approach, providing asset protection while keeping title clear and unencumbered. Furthermore, this solution increases your likelihood that your IRA will meet IRS storage requirements.