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 Replies: 13 / Views: 2,257 |
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New Member
United States
4 Posts |
https://www.wsj.com/articles/a-coup...p_lead_pos10It'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. The ruling disallows a scheme that was heavily promoted several years ago, when radio and internet ads touted the benefits of using IRA assets to buy gold and silver coins and then store them at home or in a safe-deposit box. Promoters based pitches on a perceived ambiguity in the law, despite warnings from the Internal Revenue Service and legal specialists. Edited by tripu11
12/03/2021 08:39 am
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Bedrock of the Community
United States
94367 Posts |
Thanks for that!  to the CCF! |
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Pillar of the Community
United States
869 Posts |
 Good info . . |
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Pillar of the Community
United States
2221 Posts |
Wow, I feel sorry for folks caught up in this. Kinda like someone trying to set up their own private IRA without going through an official investment company, no way for the IRS to track so they can collect taxes.
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Moderator
 United States
188052 Posts |
We all knew this was how it was going to end.  |
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Pillar of the Community
United States
616 Posts |
Here are two important rules for living a good life.
1. Don't mess with the mob in any way, shape or form.
2. Don't cheat the IRS.
Both organizations can make your life a living heck.
PS: Looks like the forum is moderated by the spirit of my mother, changing H-E double hockey sticks to heck. Sorry mom!
Edited by jskirwin
12/04/2021 11:30 am
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Valued Member
United States
312 Posts |
Addendum:
Don't try and cheat the IRS on a point so critical to the entire IRA system that the IRS couldn't possibly let it pass.
I remember thinking when these scams first surfaced.
Hmmm, keep my IRA assets in gold bullion that I could keep at home in my own safe. Stage a fake burglary. Presto! Tax free IRA!
There would be the very sticky problem of getting your IRA assets out of your IRA, without reporting, to buy the gold in the first place. But I guess that's what the scam firm facilitated.
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Pillar of the Community
United States
3343 Posts |
I read the Wall Street Journal article also. IRA's need a third-party administrator. The couple used an LLC to buy the gold within IRA rules, but skirted the third party rule and kept it in their garage. I doubt that they could have transferred the gold back into a conventional IRA even with the LLC.
Unlike a financial institution, a safe in the garage doesn't issue a 1099 if the gold is spent. And when the owners die the heirs have nothing that tells them that their gold is untaxed IRA income.
If you're going to hoard something, hoard it. Don't try to create a phony tax shelter around it.
"Two minutes ago I would have sold my chances for a tired dime." Fred Astaire
Edited by thq
12/06/2021 08:34 am
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Bedrock of the Community
Australia
21786 Posts |
Does that ruling also include ancient gold (non bullion) coins?
How about high collector value Paul Revere antique silver tableware?
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Pillar of the Community
United States
3343 Posts |
IRAs are a method of saving pretax income sel. The Federal government gets to collect the taxes eventually, but usually at lower rates after you retire.
The IRS forbids holding collectibles like rare coins and antiques in IRAs. You can own bullion, but it can't be in your possession.
"Two minutes ago I would have sold my chances for a tired dime." Fred Astaire
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Pillar of the Community
United States
5825 Posts |
Can't avoid paying taxes, but try to minimize it.
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Valued Member
United States
312 Posts |
One of the main reasons collectibles and numismatic coins are not allowed is because an accurate value cannot be assigned to them like a stock price on a given day. After you reach age 70 1/2, your IRA is valued at the end of every year and your next years RMD is calculated from that value.
You can imagine the shenanigans from low ball valuations.
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Pillar of the Community
United States
2221 Posts |
RMD now start at age 72, not 70 1/2. Used to be an inherited retirement account could be distributed over the lifetime of the beneficiary. Not now. inherited retirement funds must be distributed within ten years, the IRS wants the taxes. Edited by livingwater
12/07/2021 08:15 am
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Valued Member
United States
266 Posts |
The IRS is correct in my opinion. To have someone be in charge of their own 401k assets is just asking for fraud.
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Replies: 13 / Views: 2,257 |
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Posted 12/03/2021 08:56 am
