Can an LLC Own Precious Metals?
Many IRA owners are turning to precious metals as a form of diversification in their retirement accounts, providing both inflation protection and tangible protection from political or economic upheaval.
Investors should be mindful that storing precious metals at home could violate IRS rules regarding third party possession; an LLC provides greater legal protection by eliminating this risk and offering greater legal certainty.
When selling precious metals at a profit and realizing capital gains taxes are applied at a lower rate than stocks or real estate investments which fall under regular income tax laws.
Many Self-Directed IRA investors use an LLC as a holding platform for precious metals prior to taking them into their personal possession and avoiding third-party storage services; it is crucial, however, to seek legal advice prior to initiating such arrangements.
An LLC allows you to buy metals in the name of the company, which ensures a clear chain of title. Furthermore, an LLC allows for easier ownership transfers into an IRA account in order to comply with 26 U.S.C 408 while simultaneously lowering custodian fees. Furthermore, should any creditors attempt to seize any funds distributed through an LLC then they must first go through that entity first before seizing any distributed monies directly.
Chain of Title
Many Self-Directed IRA owners turn to precious metals as an investment vehicle to hedge against inflation and economic volatility, yet physical precious metals can be costly to store, vulnerable to theft, and subject to capital gains taxes upon sale.
Since precious metal dealers and investment facilitators recommend rolling over an IRA’s precious metals into a Wyoming LLC to create an unbroken chain of title and avoid additional transaction fees, as well as providing additional asset protection by having judgment creditors sue the LLC rather than individual membership stakes directly, precious metal dealers and investment facilitators advise IRA owners to do just this.
But creating a strong chain of title requires extensive research and documentation, as well as document substantiation for property liens or fraudulent transfers that complicate this process. Therefore, it’s wise to consult an experienced legal team prior to embarking on this investment strategy, who can assist in creating an unambiguous record of ownership while helping determine if your storage solution complies with IRS requirements.
Effective asset protection should always involve using legal means to insulate assets from exposure. This may involve trusts, corporations, limited partnerships or limited liability companies protecting the assets being protected legally. Wyoming offers some innovative asset protection advantages when investing in precious metals through Self-Directed IRAs that may reduce risks involved with investing.
Many IRA owners find precious metals an attractive investment diversification asset, yet their storage can be challenging and they may incur capital gains taxes upon sale. To mitigate these issues, many Self-Directed IRA holders opt to create an LLC to hold these precious metal investments, providing a clear chain of title.
Some dealers are advocating the use of an IRA-owned LLC to purchase and store precious metals at home, but doing so could breach IRS rules on third party possession and storage. Therefore, prior to beginning this plan it would be advisable to obtain an opinion letter from a tax and legal professional before embarking on this plan.
Many investors opt to diversify and protect against inflation by investing their IRA funds in precious metals, but be wary as precious metals are notoriously unpredictable investments that may quickly lose value – subjecting you to capital gains taxes when sold.
Some reputable precious metal dealers provide their IRA customers with the option of storing precious metals in a home-based secure storage safe; however, doing so violates IRS regulations and could incur additional taxes or penalties when rolling them over into their retirement accounts (if under 59.5 years old).
Storage costs can be costly and requires careful consideration of security needs. Furthermore, if the metals are kept at home you’ll also have to purchase homeowners insurance which may not cover their true value. Finally, securing title to property you own takes time – often necessitating visits to municipal archives or graveyards in search of chain of title documents.