A Couple Stored IRA Gold at Home. They Owe the IRS More Than $300,000.

[mahatmakanejeeves]

MARKETS | TAX REPORT

A Couple Stored IRA Gold at Home. They Owe the IRS More Than $300,000.

It can be dangerous to invest retirement-plan funds in esoteric assets without proper guidance. A husband and wife in Rhode Island have learned that lesson the hard way.

By Laura Saunders
https://twitter.com/SaundersWSJ
[e-mail]
Dec. 3, 2021 5:30 am ET

It’s official: Owners of individual retirement accounts with assets invested in gold and silver coins can’t store them in a safe at their home.

So ruled the judge in a recent Tax Court case, Andrew McNulty et al. v. Commissioner. The decision will cost Mr. McNulty and his wife Donna dearly—taxes of nearly $270,000 on about $730,000 of IRA assets, plus penalties likely to exceed $50,000.

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[FBaggins]

1. No surprise there

There are ways to have physical gold in an IRA (not that I recommend it for more than a tiny portion of your assets), but only certain forms of gold (that don't qualify as "collectibles" ) and it has to be in the possession of a custodian. You can't hold it yourself (either in your home or your safe deposit box).

Really nothing new to this ruling.

[Throck]

2. Aluminum??

I wonder how long before the IRS starts taxing people who pick up deposit cans?

[FBaggins]

3. No real difference other than the "collectibles" aspect

You could invest in aluminum in an IRA... but you couldn't hold the metal yourself.

Of course the other difference is that you could hide $300k worth of gold in a small safe. You couldn't fit that much aluminum in your average two-car garage.

[no_hypocrisy]

4. Can you legally just keep gold coins in your home

without an IRA?

[Voltaire2]

5. Sure. Why not?

This is only about the rules governing IRA accounts.

[Crazyleftie]

6. I don't understand why you can't

possess precious metals..... what's the reasoning here?