- Our content is independently written and reviewed by trusted reviewers & fact-checkers.
- Your information is never sold. We can earn money by connecting you with top Gold IRA Companies. Learn how our reviews work.
- Want to learn more? Meet our authors and explore our editorial policy.
If you’re thinking about opening a Gold IRA account, one of the questions you may have is: Is it possible to set up a Gold IRA storage at home?
Simply put, the answer to that question is ‘No.’ You cannot store the IRA-purchased precious metals yourself. They must be held by a custodian approved by the IRS. There are several crucial requirements gold IRA custodians need to meet in order to be eligible for this task.
Welcome to our home storage gold IRA guide, in which we’ll answer all of your questions on this topic, including information on the legality of gold IRA home storage, IRS regulations for storing IRA precious metals, and risks associated with a home storage option.
Table of Contents
Key Takeaways
- Contrary to what some companies advertise, storing IRA gold at home is not legal.
- The IRS requires that an IRS-approved custodian hold your IRA-purchased precious metals.
- There are strict qualifications that custodians must meet to be eligible for storing IRA assets.
- Opting for a home storage IRA comes with significant risks, including disqualification from your IRA, tax penalties, and security risks.
What Is a Home Storage Gold IRA?
Let’s start from the basics and define what a gold IRA home storage is.
Just as we said in the introduction, gold IRA home storage is not the standard storage option for precious metals acquired with IRA. By law, you are obligated to keep your physical gold at an IRS-approved facility. This often includes banks, depositories and eligible third parties.
Controlling Your IRA Assets
The only time you might be able to store your IRA precious metals yourself is when you set up a limited liability company (LLC) and meet strict IRS requirements. For many reasons, this is unattainable for most private investors.
However, that still doesn’t mean you’d be able to store your gold at home. Storage options like home safes are not eligible for holding IRA gold. In the self-custody scenario, you’d be obligated to set up a safe deposit box under the LLC’s name in a secure depository.
Even if your company fulfills the IRS requirements, there are considerable risks and potential tax implications involved. While having your physical gold at home may sound alluring, in reality, it’s simply not feasible.
Is Home Storage Gold IRA Legal?
No, a home storage gold IRA is not legal.
The IRS code (Section 408(m)) dictates that approved custodians must have physical possession of your IRA-purchased precious metals. This ensures they are stored following IRS regulations and safeguarded against theft or loss. Storing them at home violates these regulations.
Companies that may advertise home storage services are misleading and do not adhere to the current regulations.
If you decide to store your precious metals at home, it will be treated as a withdrawal and will involve appropriate tax implications. For instance, upon withdrawal, your assets will be includible in your taxable income. You may also be obligated to pay a 10% additional tax if you’re under age 59 and a half.
What Are the Qualifications for the IRA Custodian?
Now that we have established that it is not legal to store IRA precious metals at home, let’s explain what qualifications an IRA custodian must fulfill in order to be approved to manage the storage of the physical metals.
Some of the most crucial IRS requirements may include:
- Setting up a Limited Liability Corporation (LLC);
- Having an established business location;
- Presenting fiduciary experience or expertise with retirement plans and handling of retirement funds;
- Presenting a proof of solvency;
- Showcasing experience in managing accounting for a large number of individuals;
- Presenting a written document regarding the rules of fiduciary conduct in regards to the retirement plans;
- Having a net worth of at least $250,000;
- Having a fidelity bond of at least $250,000 for each owner and employee of the LLC.
All of these requirements must be met before the purchase of precious metals takes place. For most people, this route is not the most suitable solution. The application process requires substantial paperwork and results in administrative costs.
In addition to that, one must provide sufficient evidence that they have enough expertise and resources to manage retirement plans.
Gold IRA custodians are subjected to IRS audits, during which their adherence to safety regulations is verified. If the IRS finds any abnormalities or offenses, you might lose all tax-deferred benefits from the gold IRA and be subjected to additional penalties.
The Risks of IRA Gold Home Storage
What are the most substantial risks associated with gold IRA storage at home?
IRS Disqualification
As we explained already, the IRS considers storing IRA-purchased gold at home a violation of IRA regulations. This can lead to the disqualification of your IRA, meaning you lose the tax benefits and may face tax penalties.
Tax Penalties
If the IRS disqualifies your IRA, you’ll be taxed on the entire value of the gold as if it were an early withdrawal. This can include a 10% penalty on top of income taxes if you’re under 59 and a half years old. For obvious reasons, this is a situation that you want to avoid.
Security Risks
Gold is a valuable commodity. Storing it at home means you’re solely responsible for its security and bear the financial burden if it’s stolen. Homeowner’s insurance policies typically exclude coverage for large quantities of precious metals, and even if they do offer some coverage, the limits may be insufficient.
Complex Administrative Obligation
While this isn’t a direct risk in itself, it’s definitely a considerable responsibility. If you decide to manage your IRA funds by yourself, you’re opting out of professional guidance and assistance in managing, securing and maintaining your assets.
Instead, you are responsible for doing this work and liable if any misconduct occurs.
Good Alternatives To Home Storage
Instead of bearing all the risk and responsibility, you can consider some valuable alternatives to gold IRA storage at home.
Approved Custodian with Secure Vaulting
This is the standard and most recommended option. IRS-approved custodians specialize in holding IRA assets, including precious metals. They offer secure, insured vaults specifically designed to safeguard your gold.
These custodians will also handle all the administrative tasks associated with your gold IRA, ensuring everything stays compliant with IRS regulations.
Pros:
- The most common and established option
- Secure storage
- Experienced in handling IRAs
- Ensures compliance
- Complex service
Cons:
- May have storage fees associated with the service
Depository Storage
This option utilizes a depository, a specialized financial institution that securely stores precious metals for various clients, including IRA custodians.
Depositories offer a high level of security and meet strict industry standards. Your chosen custodian would likely partner with a depository to store your gold. This means the custodian manages your IRA and facilitates the secure storage of your gold at the depository.
Pros:
- Potentially higher level of security compared to a custodian’s vault
- Specialized in precious metals storage
Cons:
- May involve additional fees on top of the custodian’s charges
- Less common option, so do your research on the depository’s reputation and security measures
Working with Custodian vs Gold IRA Home Storage
| Aspect | Working with a Custodian | Gold IRA Home Storage |
| Legality | Legal and compliant with IRS regulations. Custodians must meet strict IRS qualifications. | Not legal according to the IRS code (Section 408(m)). Storing IRA-purchased gold at home is considered a violation of IRA regulations. |
| Storage Security | Custodians provide secure, insured vaults specifically designed to safeguard precious metals. | High security risk as the individual is solely responsible for the security of the gold. Homeowner’s insurance may not cover large quantities of precious metals, or the coverage may be insufficient. |
| IRS Compliance | Ensures compliance with IRS regulations. Custodians are experienced in handling IRAs and are subject to IRS audits. | Violates IRS regulations, leading to potential IRA disqualification, loss of tax-deferred benefits, and additional penalties. |
| Tax Implications | Compliant storage does not trigger tax penalties. | Considered a withdrawal; assets stored at home are includible in taxable income. A 10% additional tax may apply if under age 59½. |
| Administrative Burden | Custodians handle all administrative tasks, reducing the responsibility on the individual. | Those opting for self-custody bear complex administrative obligations and are responsible for managing, securing, and maintaining assets. |
| Costs | May include storage fees and other service charges. | While avoiding custodian fees, people face potential legal, security, and insurance costs. Additionally, violating IRS regulations can result in financial penalties. |
| Risk of Loss | The risk of theft or loss is mitigated by secure vaulting and insurance provided by the custodian. | People bear the financial burden if the gold is stolen, as homeowner’s insurance policies may not provide adequate coverage. |
Gold IRA Storage at Home – Final Thoughts
While the allure of a home storage gold IRA might seem tempting to those seeking maximum control over their precious metals investments, the legal and practical realities paint a different picture.
As we’ve explored, the IRS mandates strict regulations on the storage of IRA assets, making self-storage at home not only impractical but also illegal.
Opting for an IRS-approved custodian is the most secure and hassle-free option for most investors. IRA custodians not only ensure compliance with all IRS regulations, offering peace of mind, but also provide professional guidance, administrative support, and secure vaulting for your precious metals.
Looking for a trusted IRA custodian? Head to Gold IRA Blueprint’s Gold IRA Company Reviews for in-depth and unbiased analysis to find the most suitable, experienced custodian for your secure precious metals investment.
Article Sources
At Gold IRA Blueprint, we dive deep into the world of gold IRAs, using trusted sources to back up our insights. Our sources range from official documents to expert interviews, ensuring our content is both accurate and reliable. We also draw on research from reputable publishers to give you the most comprehensive understanding possible. Check out our editorial policy to see how we maintain our high standards for accuracy and fairness. Also make sure to check out our Financial Review Process to have a better understanding of our process.
- https://www.investopedia.com/terms/g/gold-ira.asp
- https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras
- https://www.irs.gov/retirement-plans/application-procedures-for-nonbank-trustees-and-custodians
