Can I Take Physical Delivery of Gold in an IRA?
Gold coins and bars that qualify for an Individual Retirement Account must be stored safely in an authorized depository, according to IRS regulations. Otherwise, their presence could be considered a distribution and subject you to taxes and penalties.
Instead, use a self-directed IRA to invest in gold bullion, bars and coins approved for investment. But what exactly does that entail?
How it works
Gold IRAs are retirement accounts that specialize in holding physical precious metals as opposed to paper assets such as stocks and bonds, similar to traditional, Roth, or SEP IRAs but differ by offering physical precious metals as investments with different contributions limits and distribution rules.
An IRA custodian purchases approved metals on your behalf and stores them safely within an approved depository. You may select from various approved precious metals, including coins and bullion that meet minimum fineness requirements.
Many gold IRA companies charge both an initial setup fee and annual storage fees to hold precious metals in storage. It is crucial that you select a reliable company with transparent, competitive prices that offers impartial education as well as exceptional customer service and segregated storage facilities; otherwise you could leave yourself vulnerable to fraud and potential theft.
Taxes
When opening a gold IRA, make sure that you consider both IRS rules and storage considerations. According to IRS requirements, precious metals purchased for an IRA must be stored in an IRS-approved depository with vaults meeting certain security standards; typically your self-directed IRA custodian will suggest several reliable options from which you can select one to store your precious metals.
Many investors appreciate having physical possession of their gold, so some prefer physical delivery options as an investment strategy. If this is your choice, however, be aware that any taxes due will need to be paid on any distribution.
Additionally, should you sell gold before retirement, the dealer will repurchase it at market prices–meaning you could lose some of your buying power that a Gold IRA gives you. By contrast, traditional IRAs allow closure without incurring losses in purchasing power.
Storage
Home storage of precious metals in an Individual Retirement Account (IRA) is not approved by the Internal Revenue Service and could result in serious tax penalties. Instead, an IRA custodian will buy gold coins and bars on your behalf before sending them off to a depository that specializes in protecting IRA precious metals.
Some depository vaults provide dedicated individual IRA storage. Others provide combined or commingled storage, where your assets may be kept alongside those of other investors. Either way, your IRA metals should be clearly labeled with your name on them for future reference.
Consider selecting a precious metals IRA company with competitive pricing, transparent investing practices and an honest customer education program. Your custodian should also offer safe-storage that conforms with IRS regulations; U.S. Money Reserve provides this with their white-glove service and high buyback price so you can cash out any time without incurring penalties from withdrawal penalties. An experienced storage partner also adds great value.
Withdrawals
Withdrawals from an IRA may be made through transfers from another retirement account, rollovers between accounts, or direct cash deposits. You can also utilize a self-directed gold IRA to invest in precious metals like silver and platinum as well as bullion.
Depending on the terms of your IRA custodian’s recommendation or work on your behalf, physical possession of metals will be stored in an IRS-approved depository where a storage fee will be payable annually.
Remember, though, that physical gold received as distribution is considered a taxable event by the IRS and therefore you should carefully consider your options to find one that makes the most sense for your financial goals. Discover more of the advantages of a gold IRA by requesting our free information kit now – it includes details on all three steps involved with setting one up as well as guidance in selecting an ideal custodian to meet them!
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