How are you? A couple months ago I was inquiring about a self directed IRA and home storage for gold. I was looking back through email, but did not find an answer. I think we might have spoken, but I do remember that Quest did not support home storage in an IRA. One question I still have is if not home storage, how does Quest store and manage gold in a self directed IRA. Also, if you don’t mind, what are the caveats associated with home storage? I have another service I investigated that is still pushing their home storage option. Thank-you for your time and assistance.
In the past we have simply used one of the gold depositories. There are a number of them that store physical gold for custodians. However, it always was a tiny part of our business.
In general Internal Revenue Code Section 408(m)(3)(B) contains the exception to the general rule that investments in collectibles, including any metals, is treated as a distribution from the account (see IRC 408(m)(1)). The exception applies ‘if such bullion is in the PHYSICAL POSSESSION of a trustee…’ (emphasis added). I assume, and I may be wrong, that the ‘home storage companies’ (for lack of a better term) have you open some type of LLC or other entity of which you are the manager, and argue that your IRA’s investment is therefore not in metals directly but rather in the shares of an LLC that owns metals. They believe this gets around the statutory requirements for the physical possession of the metals to the in the name of the trustee or custodian.
As you have noted, we have found it administratively infeasible to hold investments in the way that we understand the home storage companies propose. Neither Quest IRA, Inc. nor I may provide you with tax, legal or investment advice in this or any other area. In a self-directed IRA of any type, it is up to you to make the determination of whether or not the proposed investment is acceptable for an IRA. If you decide to go down this path, then you should look carefully at the documents to satisfy yourself that their method passes IRS scrutiny. Perhaps they even have a ruling that you can look at to help you feel more confident.
I wish you the best of luck, and I’m sorry I can’t be of any further assistance to you at this time.