Can You Take Possession of Your IRA’s Gold Coins?

Examples of the types of gold coins allowed in an IRA

May you personally possess your IRA gold coins? I heard an ad recently from a ‘financial’ company stating that, with their IRA account, you may take physical possession of allowable coins owned by your IRA. My IRS radar kicked into high gear. This company’s website touts that you may physically possess the types of coins depicted in the photo above. Here are some issues I have with that statement and why I believe this may be a BAD idea.

Personal Possession of IRA gold coins is not settled law

If you want to walk the edge of unsettled law, and some of my clients are willing to take that path, then ok. However, I want you to know the risks. If you follow the advice of this SDIRA promoter, and the IRS ends up disagreeing with you, SDIRA cases such as Peek and Ellis tell us that the IRS will not allow a “relied on professional advice” as a valid defense. This promoter is not going to take the fall for you. They are not regulated such that you can say they violated any regulatory standards. They have no liability insurance that will cover you.

Their statements are wisely crafted by their own attorneys (who represent them, not you) to ensure you carry the liability. If you come to me as your attorney, and want my written opinion which will allow such a defense with the IRS, I am NOT going to tell you to personally possess your IRA’s coins. This is unsettled law. There are legal issues with this idea which I believe will ultimately require a case that settles the issue. Keep in mind that IRA custodians must now inform the IRS if an IRA is invested into certain types of investments, which includes precious metals. Do you want to be the test case?

Personal Possession of Other Assets is Known to be Strictly Prohibited

Suppose you purchase real estate with your IRA funds. May you title that real estate in your own name? Absolutely not. Everyone knows this. Titling IRA assets in your own name is a prohibited transaction between qualified funds and a disqualified person unless reported as a taxable distribution. How about a boat, stocks, bonds, mutual funds, cash in a bank account? Any asset that has a title needs to be in the name of the IRA (or subsidiary LLC or Trust the IRA funds and you manage). The IRA, or subsidiary, needs to own any account which requires an owner ). We all know this. So how does the financial company believe you can possess coins owned by your IRA without getting in trouble with the IRS ?

Their answer is that you get a separate strong box, or home safe, and only keep the IRA’s coins in that separate container. One of the companies advertising this concept is even willing to include such a separate small home safe. Your own inventory is in a different strong box or home safe. Voila! No personal transfer, right? The IRA owns the safe. I personally believe that the IRS is going to win if that is the scenario presented to the court.

A friend of mine, who is a member of The American Numismatic Society, told me the other day that he is also concerned about these new ads. The ANS has told its members to not allow their clients to take physical possession of their IRA gold coins. You will not find any ANS member dealer who will help facilitate such transactions. What is a government adverse person, like me, supposed to do?

What If You Still Want Personal Control of IRA Gold Coins?

I totally understand why people want personal control over gold, silver, platinum in these crazy times. I know people who will tell you that if they have 10 guns, and the government stating individuals may own no more than two weapons, they will still have 10 guns. People want control of their IRA gold coins in case the economy tanks, coins become the basis of a black market economy, and the government requires their surrender. This happened under FDR.  They do not want an institution such as an IRA custodian to turn over their coins to the government. Not everyone believes that we are potentially facing such dire economic times, or that the U.S. government might require the surrender or registration of precious metal coins. I personally believe that if the former happens, the latter will certainly follow.

Am I willing to create an IRA which will allow you to personally possess your IRA gold coins? Yes. I believe there is a way that is less risky than what that financial company offers. I am not going to detail my idea here, but I will chat about it with interested parties. You may set up a no cost, no obligation introductory call here.

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