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A Couple Stored IRA Gold at Home. They Owe the IRS More Than $300,000.
Wsj ^ | 3 Dec 2021 | Laura Saunders

Posted on 12/03/2021 7:20:05 AM PST by DUMBGRUNT

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To: DUMBGRUNT

I believe that this ruling will be applied to people storing Bitcoin off the grid in private wallets.


61 posted on 12/03/2021 8:26:18 AM PST by jimmygrace
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To: King_Corey

I considered purchasing gold for my IRA but decided against it after reading the regulations regarding storage of it. I don’t like the rules but it is clear that keeping your “IRA gold or other precious metals” in your own home is not permitted. Please correct me if I am wrong.


62 posted on 12/03/2021 8:28:09 AM PST by Maine Mariner
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To: montag813

The story is a little confusing. They are not in trouble for holding gold in their safe. They are in trouble for using the LLC to “hold” their cold for an IRA. Which, evidently, is against the rules.

So...the government isn’t after seizing your gold. It is trying to “protect” the public from insecure handling of “retirement funds.”

Its OK to disagree with the ruling...but I think the ruling isn’t really what this article indicates it is.


63 posted on 12/03/2021 8:30:47 AM PST by Vermont Lt
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To: DUMBGRUNT

I ran into this. You can put your IRA into physical gold, but it needs to be held in an IRA trust, and you can not be the grantor, trustee AND beneficiary of the trust. Plus, you can not physically touch the gold, it need to be held in a separate place, controlled by the trust.

The “You Can Own Gold in Your IRA” hucksters don’t really explain that. They just take your “fiat money” and give you gold, and you’re on your own to figure out the legal way to do it.

(Hey, wait a minute - why do they want my money, if it’s no good? And why are they giving me gold if it’s so valuable? Is it just because they are nice guys who want to help me?)


64 posted on 12/03/2021 8:32:31 AM PST by Fido969 (45 is Superman!)
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To: Magnum44
If you dont want to get into this trap, contribute only to Roths. If you are contributing to traditionals, stop and start contributing to Roths.

Many corporations only offer matching-contribution 401Ks as retirement plans.

Can you convert a corporate retirement 401k to a Roth IRA? The corporation certainly isn't going to contribute to the Roth for you.

65 posted on 12/03/2021 8:33:17 AM PST by Yo-Yo (is the /sarc tag really necessary?)
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To: G Larry
They had possession of their IRA assets which makes it a taxable withdrawal.

Exactly right. It's amazing, based on the knee-jerk comments here, how many people are clueless with respect to that fact.

66 posted on 12/03/2021 8:33:50 AM PST by Fido969 (45 is Superman!)
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To: Harmless Teddy Bear

I suspect you are correct and I will be watching this case.

We don’t know some important details, but she seems to have worked to do everything correctly… so I’m assuming she followed the existing rules.

We’ll see


67 posted on 12/03/2021 8:35:00 AM PST by aMorePerfectUnion (Fraud vitiates everything ᡕᠵ᠊ᡃ࡚ࠢ࠘ ⸝່ࠡࠣ᠊߯᠆ࠣ࠘ᡁࠣ࠘᠊᠊ࠢ࠘𐡏⁻ )
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To: Harmless Teddy Bear

I suspect you are correct and I will be watching this case.

We don’t know some important details, but she seems to have worked to do everything correctly… so I’m assuming she followed the existing rules.

We’ll see


68 posted on 12/03/2021 8:35:01 AM PST by aMorePerfectUnion (Fraud vitiates everything ᡕᠵ᠊ᡃ࡚ࠢ࠘ ⸝່ࠡࠣ᠊߯᠆ࠣ࠘ᡁࠣ࠘᠊᠊ࠢ࠘𐡏⁻ )
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To: Harmless Teddy Bear
They did not violate the rules as gold is not legal tender.

It had nothing to do with rules for owning gold. It had to do with rules for withdrawing and rolling over funds from an IRA.

69 posted on 12/03/2021 8:35:23 AM PST by Fido969 (45 is Superman!)
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To: Leaning Right

>>But what if you didn’t even know you did a crime?

If that happens, when you learn you DID “the crime” you correct it immediately and work to settle it with the IRS. Intent matters...and if you turn and pay the taxes you will go a long way to staying out of court and out of jail.

Fighting a losing battle with the IRS is expensive.

The cost of fighting something you know you did is silly.


70 posted on 12/03/2021 8:35:44 AM PST by Vermont Lt
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To: Leaning Right

Igorance of the law...is not defense.


71 posted on 12/03/2021 8:37:19 AM PST by SgtHooper (If you remember the 60's, YOU WEREN'T THERE!)
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To: Yo-Yo

Depends on hwat the company offers, but my company allows me to decide if I contribute to Roth or Tradition. Now, matching funds from the company, which are untaxed at timer of deposit, must be traditional and you are responsible for taxes on withdrawal. At 59 1/2 years of age you can rollover those tradition contributions to Roth, paying the tax for it at time of conversion (a time of your choosing convenient to your tax and retirement planning to minimize your taxable income). Once rolled over, contributions and gains are tax free when you withdraw.


72 posted on 12/03/2021 8:39:11 AM PST by Magnum44 (...against all enemies, foreign and domestic...)
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To: John S Mosby

Ok. So each of us can create an LLC, manage it, and buy precious metals to hold in the LLC without being taxed, for ultimate distribution to the creator who then has a tax liability.


73 posted on 12/03/2021 8:41:55 AM PST by SgtHooper (If you remember the 60's, YOU WEREN'T THERE!)
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To: taxcontrol

Or perhaps the couple could create some paper “Gold Certificates” and transfer the certificates to a fiduciary, while keeping the actual gold in their safe. Seems like there’s a precedent for that.


74 posted on 12/03/2021 8:42:42 AM PST by Auntie Dem (Hey! Hey! Ho! Ho! Terrorist lovers gotta go!)
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To: Yo-Yo
Wow, I had a lot of typos in my earlier reply. Lets try that again, just in case it was not clear...

Depends on what the company offers, but my company allows me to decide if I contribute to Roth or Traditional. Now, matching funds from the company, which are untaxed at time of deposit, must be traditional and you are responsible for taxes on withdrawal. At 59 1/2 years of age you can rollover those traditional contributions to Roth, paying the tax for it at time of conversion (at a time of your choosing convenient to your tax and retirement planning to minimize your taxable income). Once rolled over, contributions and gains are tax free when you withdraw.

75 posted on 12/03/2021 8:46:44 AM PST by Magnum44 (...against all enemies, foreign and domestic...)
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To: DUMBGRUNT

Here is a more extensive article that details this case and the legal reasoning.

https://www.currentfederaltaxdevelopments.com/blog/2021/11/20/taxpayer-found-to-have-distribution-from-self-directed-ira-for-coins-owned-by-llc-held-by-ira-stored-in-taxpayers-safe-at-home


76 posted on 12/03/2021 8:47:20 AM PST by aMorePerfectUnion (Fraud vitiates everything ᡕᠵ᠊ᡃ࡚ࠢ࠘ ⸝່ࠡࠣ᠊߯᠆ࠣ࠘ᡁࠣ࠘᠊᠊ࠢ࠘𐡏⁻ )
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To: DUMBGRUNT

There’s a reason why the tax code is so complicated. That makes it easier for a rich man’s tax lawyer to avoid paying taxes, and it makes it easier for the IRS to persecute someone who can’t afford said tax lawyer...


77 posted on 12/03/2021 8:57:59 AM PST by Clioman
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To: John S Mosby
The lady according to the article chose to sell the coins from the IRA for the market value, forced by the “laws” as the IRS decides them— to do so. And thus forced to pay a tax on would guess not only the distribution cash value but also on the increase.

Are you reading an article from a source other than the Wall Street Journal?

The WSJ article doesn't say that they sold the coins at all. It does say "[b]ut in an IRS audit, Mr. McNulty, a Rhode Island-based plant manager at a sailcloth factory, conceded that he engaged in prohibited transactions in 2015 and 2016, although the decision didn’t say what they were. That dissolved his IRA and caused taxable IRA payouts to him of about $316,000."

But that didn't include the gold held in the family safe.

The article continues "[t]hat left two issues for Tax Court Judge Joseph Robert Goeke to decide: whether Donna McNulty’s storage of about $411,000 of gold and silver American Eagle coins in a safe at her home was permitted under the law, and whether the couple owed stiff penalties for understating their tax. The couple lost on both issues."

No mention whatsoever about selling the coins.

78 posted on 12/03/2021 9:03:00 AM PST by Yo-Yo (is the /sarc tag really necessary?)
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To: DUMBGRUNT

How dare these peasants control government...I mean their own money!


79 posted on 12/03/2021 9:11:20 AM PST by Eagles6 (Welcome to the Matrix . Orwell's "1984" was a warning, not an instruction manual.)
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To: Sgt_Schultze

American eagles would be valued as bullion, market price.


80 posted on 12/03/2021 9:11:57 AM PST by hinckley buzzard ( Resist the narrative.)
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