The trouble with gold and silver checkbook IRAs
A strategy that could sabotage the tax-deferred status of your retirement plan
Setting up a precious metals IRA need not be difficult, expensive, or time-consuming. We are happy to assist you in filling out your account set-up forms. This can be done online over the phone quickly and easily. Your call is welcome.
“While many believe that checkbook control IRAs are IRS-approved, nothing could be further from the truth. In fact, these accounts appear to be a major concern of the IRS, as evidenced by their repeated inclusion in the agency’s annual ‘Dirty Dozen’ list of tax scams.” – Equity Trust
“There’s pretty much no question that the standard checkbook IRA and its variations are violating a number of IRS laws dealing with prohibited transactions and self-dealing. It sounds great to be able to access your IRA money today without any tax or penalty, but it won’t work. The checkbook IRA structures will be officially declared illegal by the IRS. The penalty can be as high as the loss of your entire IRA.” – Lee Phillips, Counsel to the Supreme Court
If you’ve done any meaningful research into opening a precious metals backed IRA, you’ve surely come across numerous ads featuring a smiling middle-aged man or couple, sitting comfortably next to their safe filled with gold coins and bars, and the caption, “Get your gold IRA delivered to your home!” or “Take control of your retirement account today with a home storage IRA!” “Take checkbook control of your IRA,” they say, even going so far as to say, ‘Store it under your pillow!’
Sounds pretty good, right?
In this case, the old adage applies: “If it sounds too good to be true, it probably is.” In a Physician’s Money Digest article titled “Checkbook IRAs are on IRS radar,” CPA Clark Gardner summed it up best: “Do you really think the IRS is going to let you spend your IRA money any way you want before retirement age without taxes or penalties?”
At the link below, Equity Trust, one of the top administrators for self-directed retirement plans, tells why converting to a self-stored, precious metals LLC-IRA might be one of the more costly, dangerous and unnerving strategies you could undertake with your retirement nest egg.
For our part, we at USAGOLD see the checkbook IRA as a risky, problematic approach to precious metals retirement planning and a bad choice for our clientele. The traditional self-directed IRA account placed with a solid trust company is still the safest avenue for the retirement investor and is most likely to deliver the intended results.
Note: After posting this page, the Wall Street Journal published an article (9/2/16) stating that the “IRS has issued a stern warning” against personal storage of IRA gold holdings. The IRS, says the WSJ, “warns taxpayers to be wary of anyone claiming that precious metals held in your IRA can be stored at home or in a safe-deposit box.”
Checkbook IRA’s Exposed
Discover what checkbook promoters don’t want you to know
One last note: One of the reasons promoters push checkbook IRAs is to sell investors independently graded modern bullion and proof American Eagle gold and silver coins priced at very high, and often unsustainable, premiums over their gold content. Much of that premium goes to the promoter in the form of mark-up and commissions. Though a trustee, like Equity Trust, can guide you through the process of unwinding an unwanted LLC-IRA, it will not offer much help in the way of recovering the high commissions and bid/ask spreads attached to those investments. If you have yet to be snared by the LLC-IRA/proof American Eagle sales pitch, consider yourself lucky. We can help you establish a practical, safe-haven precious metals IRA for all seasons without the exorbitant bid-ask spreads. If you have, we offer a strategy to help investors with this problem – a repositioning of those assets that at least elevates your chances of recovery if the price of gold and silver cooperate. Please call the ORDER DESK for more information.
A word on USAGOLD – USAGOLD ranks among the most reputable gold companies in the United States. Founded in the 1970s and still family-owned, it is one of the oldest and most respected names in the gold industry. USAGOLD has always attracted a certain type of investor – one looking for a high degree of reliability and market insight coupled with a professional client (rather than customer) approach to precious metals ownership. We are large enough to provide the advantages of scale, but not so large that we do not have time for you. (We invite your visit to the Better Business Bureau website to review our five-star, zero-complaint record. The report includes a large number of verified customer reviews.)