Can I Set up a Home Storage Gold IRA? (2024)

Personal Finance Gold

Updated Aug 27, 2024

4-min read

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Expert Approved

This article has been reviewed by a
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Written byMegan Hanna

Written byMegan Hanna

Expertise:Personal loans, home loans, credit cards, banking, business loans

Dr. Megan Hanna is a finance writer with more than 20 years of experience in finance, accounting, and banking. She spent 13 years in commercial banking in roles of increasing responsibility related to lending. She also teaches college classes about finance and accounting.

Learn more about Megan Hanna

Reviewed byErin Kinkade, CFP®

Reviewed byErin Kinkade, CFP®

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IRA Allowable Precious Metals9 Best Gold IRAs Of September 2024Is a Gold IRA for Seniors Smart for Retirement?Should You Get a Gold IRA?

Expertise:Insurance planning, education planning, retirement planning, investment planning, military benefits, behavioral finance

Erin Kinkade, CFP®, ChFC®, works as a financial planner at AAFMAA Wealth Management & Trust. Erin prepares comprehensive financial plans for military veterans and their families.

Learn more about Erin Kinkade, CFP®

Investing in gold and other precious metals is popular, and you may have seen ads for “home storage” gold IRAs. While the concept sounds appealing, it’s essential to understand that setting up a home storage gold IRA is impossible under IRS rules and could even be illegal.

Keep reading because we’ll explore why home storage gold IRAs are not permissible, the IRS regulations surrounding gold IRAs, and legitimate ways to store your precious metals. We’ll also provide a list of reputable companies to consider to help you set up a gold IRA correctly.

What does the IRS say about home storage gold IRAs?

The IRS states that IRA-purchased precious metals must be held with IRS-approved banks and trustees. It is not possible to store investments in gold or other precious metals included in an IRA at home.

Investors can purchase and hold physical gold in a home safe, but the IRS prohibits this with IRA-purchased gold and other precious metals. Section 408(m) of the IRS code defines what types of precious metals may be purchased with a self-directed IRA. The code also says these items must be “in the physical possession of a trustee.”

The IRS issued a further explanation on the subject on this FAQ page. It reads: “Gold and other bullion are ‘collectibles’ under the IRA statutes, and the law discourages the holding of collectibles in IRAs. There is an exception for certain highly refined bullion provided it is in the physical possession of a bank or an IRS-approved nonbank trustee.”

In further proof that home storage is not allowed when using an IRA to purchase gold, the Industry Council for Tangible Assets (ICTA), an industry watchdog, issued a whitepaper in 2018 titled “The Prohibition on Home Storage of Bullion Held in an IRA.”

Example of a deceptive ad

The home storage gold IRA ad below is deceptive. It shows dozens of gold bars in a safe at home and includes a promotional offer for a free safe with a home storage purchase. This ad is either misleading or encouraging illegal activity.

The risks of a home storage gold IRA

Investors who break the rules and keep IRA-purchased gold at home could face several serious consequences:

• Distribution penalties: Keeping your gold at home is considered a distribution, and if you’re under age 59½, you’ll be penalized 10%, and the full amount is taxed as ordinary income.
• Loss of tax-deferred status: The investments will no longer be tax-deferred, meaning you’ll owe income taxes on the distribution, which could be substantial.
• IRS audits: Improper account activity could trigger an IRA audit, leading to additional fines and penalties.

Why are home storage gold IRAs so confusing?

Confusion surrounds gold IRAs because of “home storage” IRA ads.

You can set up an IRA-owned limited liability company (LLC) and direct the IRA purchases as long as you meet stringent IRS requirements, but you still can’t store the gold at your house. It must be in a secure depository location under the LLC’s name—a safe-deposit box at a bank, for example.

Putting the gold in a safe or under the mattress at home would qualify as a distribution. If you’re under 59½ years of age, distributions are viewed as an early withdrawal and come with a 10% penalty and again, along with the full amount being taxed as ordinary income

How does a gold IRA really work?

Gold IRAs are often called self-directed IRAs, but you can use them to purchase IRS-approved gold bullion, precious metals, and other assets.

To open a gold IRA, follow these steps:

1. Select a custodian and open the account. You must work with an IRS-approved custodian—often a bank or other financial institution. The custodian handles the disbursem*nts, keeps records for the account, and does the required IRS reporting.
2. Move funds into the account. Once opened, you can fund the IRA using a rollover or transfer from another retirement account or contribute via check or wire payment. If you’re younger than 50, the 2024 maximum annual contribution is $7,000.
3. Buy IRS-approved gold or precious metals. After funding your account, you can direct your IRA custodian on what IRS-approved gold to buy and how much. The gold must be stored in an approved depository once purchased.

Gold IRAs can diversify your retirement portfolio by investing in IRS-approved precious metals. You can securely and legally manage your gold investments by following the necessary steps and adhering to IRS guidelines.

Where can I open a gold IRA account the right way?

With so many scams and misleading advertisem*nts, it’s essential to do your research before opening a gold IRA account. Compare several options, check reviews and ratings, and ensure the company is reputable and experienced before moving forward.

Two of our top recommendations include:

Need help getting started? Check out our guide to the best gold IRA companies.