Precious Metals in Your Self-Directed IRA
You can rollover or transfer funds from an IRA, Roth IRA, 401(k), 403(b) and other retirement accounts, without incurring taxes or penalties, into a Self-Directed IRA and purchase physical precious metals. Normally an IRA custodian will require you to hold your physical metals in a depository or safety deposit box. In the right kind of Self-Directed IRA along with the right LLC, individuals can personally hold specific gold and silver coins. Not only do you need the right kind of IRA and LLC, you need the right gold and silver coins and the trustee which allows you to control, manage and hold your coins. We work with several IRA custodians that provide the reporting while you have direct control over your Self-Directed IRA.
With a Self-Directed IRA, one can own and hold physical precious metals in an IRA. With the Self-Directed IRA and right LLC, you can take physical possession of your precious metals. This is increasingly important as investors desire to protect and grow wealth. Physical precious metals are a way to help investors accomplish this goal. A truly diversified portfolio should hold precious metals as a hedge against inflation and to diversify investments. A Self-Directed IRA can help achieve this objective.
Advantages of Precious Metals in Your IRA
No Taxes or Penalties: One of the biggest benefits of purchasing precious metals in a Self-Directed IRA or Roth IRA comes from the ability to transfer your retirement account into the IRA and not incur taxes or penalties. Upon retirement, often you may elect to rollover your retirement plan into an IRA. Contact your plan administrator for more information on your retirement plan and whether this option is available.
Diversification: Through an IRA, you can own physical precious metals in your IRA and therefore diversify your investment portfolio. A diversified portfolio which includes precious metals is a good way to reduce risk to shield against value erosion. Precious metals are a buffer against financial instability, inflation and hyperinflation. Precious metals have a low correlation to the stock and bond market. They are a place of diversification during unpredictable times and events.
Flexibility: You can keep your physical precious metals or cash out of your precious metals holdings when you desire. You have the flexibility to sell when you want.
Advantages of an LLC
Physical Possession: If you desire to have the precious metals in your physical possession, then an LLC is needed along with the Self-Directed IRA. The right LLC with the correct language provides part of the necessary process to enable you to do so. Be advised that this is just one of the pieces needed. The custodian must allow physical possession of your metals. In addition, purchase the correct coins to fulfill the IRA codes and requirements as well as Department of Labor (DOL) rules. Note that not all custodians will allow you to have physical possession of your precious metals. Some require storage of metals in a depository of their choice. However, using the right kind of IRA, gold and silver coins, and trustee, you can take physical possession of the metals. This is a huge benefit over having your gold and silver stored in a depository or bank safety deposit box. It is the combination of the Self-directed IRA and the special LLC that yields the benefits of physical possession. For more information on this subject refer to the Resources tab and look under FAQ (Frequently Asked Questions).
More Power: An LLC (Limited Liability Company) is a business entity representing a cross between a partnership and corporation. The LLC provides the liability protection of a corporation while it is taxed as a partnership. Therefore the LLC will not pay the taxes but the owners of the LLC will pay the taxes. At the manager’s discretion the funds may remain in the LLC while the tax liability passes on to the owners of the LLC. The sole owner of your LLC is your IRA and you are the manager unless you appoint someone else. This strategy results in no taxes owed on the profits generated in the LLC unless you elect a distribution or use leverage in buying real estate. Note that if the LLC is improperly drafted, the entire LLC IRA may be disqualified and taxed.
Asset Protection: In some states, the IRA may be subject to judgments and creditors. An LLC offers asset protection to those assets held inside the LLC. The only asset in the IRA is the ownership of the LLC. The assets in the LLC are protected by all the IRA laws and also by the LLC laws and statues. Under the law, your IRA and LLC are viewed as separate legal entities. Your IRA funds are in an LLC bank account, stocks are held in a LLC brokerage account and any other assets titled in the name of the LLC. The owner of the LLC is the IRA and you are the manager of the LLC. Because your IRA and LLC are seen as separate legal entities, there is great asset protection to those assets held inside the LLC. The only asset in the IRA is the LLC. Under most state laws, should someone win a lawsuit against the owner of an LLC, he or she cannot take the assets from the LLC owner that belongs to your IRA. They could receive a charging order against the LLC. A charging order does not give full rights over the LLC since you, as the IRA owner, manage the LLC and investments. They would have rights to the distributions. However since you are the manager, you make the decisions to distribute. Talk to your attorney regarding an LLC.
There are a few simple steps. Call Eagle European Capital, LLC and ask for IRA specialist, Jill Taylor Gordon, CFP, MBA and RIA. She will explain this process step-by-step, answer questions, and help you with how to set up and fund an IRA with precious metals, using an LLC.
1. Set up and fund the IRA
To start the process, first complete the IRA paperwork. An IRA account will be set up with an IRS approved Self-Directed Custodian. The old custodian will be contacted and directed to transfer your IRA to the new custodian. You may transfer all or part of your retirement plan into the IRA. There are many retirement plans that can roll over into an IRA. These include IRA, Roth IRA, 401(k), 403(b) etc. This is considered a roll over and therefore is not a taxable event.
2. Open and fund an LLC
Complete the account paperwork to open your LLC naming your Self-Directed IRA as the LLC owner. The LLC Operating Agreement and Subscription Agreement have to be precisely worded. This is not a typical LLC. As the manager, you cannot take any compensation nor have any self-dealings unless you have an exception from the DOL. The completed SS-4 from will be sent to the IRS for an EIN for the LLC bank account.
3. Set up the LLC bank account
Set up an LLC bank account wherever you wish. Complete paperwork with the custodian to transfer your IRA monies to the LLC bank account. You are now ready to invest using the LLC checkbook. The LLC holds all assets, protected by the nature of a LLC.
4. Purchase your precious metals using your LLC
Call to place your precious metals order for your LLC. Wire your LLC funds to Eagle European Capital, LLC for the appropriate amount of precious metals you wish to purchase. Your metals will be delivered to you.
Advantages of Eagle European Capital LLC
Physical Possession: You can have physical possession of your IRA precious metals when you follow IRS requirements. Not all precious metals companies are aware of the criteria for holding metals personally. Some trust companies require holding of your metals in a depository of their choice. With our sources, you keep physical control of your precious metal coins.
Experience: With over twenty years of financial planning experience, including IRA and retirement planning, we can walk you through the entire process step-by-step. Not all companies are familiar with meeting the criteria necessary to personally hold your physical precious metals in an IRA. We are a telephone call away to walk you through the process.
Knowledge: We have relationships with companies that can process your retirement plan into a precious metals IRA. Our sources have been in the business for many years and have the expertise necessary to enable and streamline the precious metals IRA.
Product Delivery: We will deliver the precious metals to you for holding in your physical possession. While we do not recommend storing your metals at a depository, this option exists as well.
Discount on the LLC Set Up Cost: We have negotiated a discount for all of our clients. You must go through us to receive this discount. Also, be advised that a regular LLC does not have the specific language that satisfies all of the IRA codes and requirement, and the Department of Labor (DOL). All rules must be strictly followed.
Best Interest of Clients: While EEC negotiated a discount for the LLC set up cost, we do not receive any payment for clients sent to sources for IRA or LLC establishment. Our goal is to provide connections for clients with companies that share our commitment to integrity while helping investors grow and protect their wealth. Although we do profit from trading precious metals, we do not take advantage of our clients, nor will we sell personal information. We assist your initiate contact with recommended LLC and IRA trust companies and we act only as liaisons so that you may benefit from any negotiated discount.