Gold In IRA

timcoin

Am thinking about setting up an account with either Gold Star or Sterling Trust and putting some gold and silver in my IRA. Anybody here have any experience with putting PM's in an IRA, or with those companies? Would sure appreciate some advice! Thanks

topstuf

Why not use CEF that doesn't take anything more than a regular brokerage IRA?
It is bullion (half silver, half gold) stored in Canada and independently audited.
Bullion for emergency uses would be no good in an IRA. Buy the coins with your regular money.

???????????

It is NOT a convoluted ETF like GLD or SLV. Just a straightforward storage of bullion.

dbcoin

CEF is a closed end stock fund. As such, it trades at a steep premium to its underlying assets (about 15%). You are thus paying a premium to hold a piece of paper that says you hold a piece of metal. Every so often, the custodian of CEF does a secondary offering to large investors and those investors get to buy CEF without the premium. IF you can get in on one of those deals, go for it. Otherwise you are better off splitting your money across GLD and SLV

fishcooker

If I read that right, you pay them to hold cash in an IRA. Plus there's pretty stout fees. Maybe they aren't stout if an account has millions of dollars.

I think I'll stay with traditional brokers until I do.

PerryHall

The biggest difference between paper gold and physical gold is that when you sell, the government knows what profit you made with the paper gold.

pmac

<< <i>The biggest difference between paper gold and physical gold is that when you sell, the government knows what profit you made with the paper gold. >>


Help me out. If you have physical gold in an IRA and it's time to redeem it, you pay differred taxes on the whole amount, just like any other IRA, right? How does the government not know or care about profit? Do you pay more tax on the profit? Just being the uneducated me, I guess.

streeter

For the life of me,

I have never been able to figure out why anyone would want to put GOLD into an IRA.

Your IRA is tax deferrred. Since Gold doesn't throw off any income....why shelter it?

If you go to a shop and purchase an AGE or such, outside of an IRA....it's tax deferred also. And the added benefit is...you have the gold in your possession. Bullion gold is 'INSURANCE' and preservation of wealth...why you would want anyone to have possession of your gold is beyond me. When you really might NEED that insurance...there is an increasing likelyhood that you may not be able to lay your hands on your own possessions if they are "stored in Canada" or "stored anywhere else" for that matter.

Remember, there are relatively few times in this country's history when POSSESSION of assets has been very important.
During the Revolutionary War
During the Civil War
During the Depression

Some might say that it is about time once again.

topstuf

<< <i>CEF is a closed end stock fund. As such, it trades at a steep premium to its underlying assets (about 15%). You are thus paying a premium to hold a piece of paper that says you hold a piece of metal. Every so often, the custodian of CEF does a secondary offering to large investors and those investors get to buy CEF without the premium. IF you can get in on one of those deals, go for it. Otherwise you are better off splitting your money across GLD and SLV >>



CEF premium varies. When it approaches 12-15%, they usually float more shares (which knocks down the price temporarily) but the money is used to purchase more bullion. Lately, its premium has been par or below the premium on bullion gold coins.

It can be checked here:
CEF net asset value

Day before yesterday, it was 6.9 or thereabouts. I won't buy it at higher premium than coins.

That said, I agree that an IRA is a lousy place for gold. The only reason to hold CEF in an IRA is to be able to trade bullion and skim dips and tops. Also, many people only HAVE ...IRA funds... to invest.

CEF is superior in another way to GLD and SLV..... it is not taxed as a "collectible" at 28%.

I primarily own physical but use CEF to play with when I want some stuff to buy on a dip and resell.

It's also a good holding for just building and using in yer old age to sell piecemeal in a taxable acct where you can buy quantity and sell dribs and drabs. That way...IF.... gold goes TO DA MOON, you can draw it out when you're a geezer as you need it at regular cap gain rates (unless THAT gets changed)

From my investigation, it's the best bullion STORAGE shares I've found.

PerryHall

<< <i>

<< <i>The biggest difference between paper gold and physical gold is that when you sell, the government knows what profit you made with the paper gold. >>


Help me out. If you have physical gold in an IRA and it's time to redeem it, you pay differred taxes on the whole amount, just like any other IRA, right? How does the government not know or care about profit? Do you pay more tax on the profit? Just being the uneducated me, I guess. >>



When you have gold in an IRA, you don't have physical possession of the gold. You have a PAPER receipt. Big difference. When you cash in your IRA, the IRS knows all about it so you'll have to pay taxes on any profit.

roadrunner

Otherwise you are better off splitting your money across GLD and SLV

I hope no one is foolish enough to do this for anything short of quick trading scenarios of days or weeks at a time. Even in that case I'd rather go to the Canadian gold trusts (CEF or GTU) since their accountability is far superior. In time, it will be found out with both SLV and GLD that they have been using some derivatives as inventory. There is no way with the games going on with the big banks (JPM, HSBC, Barclays, BONY, etc.) that they haven't been tempted to go in that direction. Why wouldn't they since the CFTC and SEC have closed their eyes to their antics? The FED and Treasury would encourage it. There is nothing in the prospectus that says they can't. And if they were to be found out, there would be the obligatory wrist slap and a simple oversight due to some tardy accounting paperwork that was lost in cyberspace.

If you put gold bullion into an IRA you get back only cash, probably exactly what you won't want in extended inflationary/deflationary scenarios. Better off just paying the taxes and buying it with your ordinary income. If it's not in your hand, what good will it do if computers are locked down, banks on holiday, trading systems kaput, etc.? Isn't that one of the major scenarios you need it for?

roadrunner

timcoin

I was thinking that the main benefit would be being able to purchase more bullion with pre-income tax dollars, which is especially helpful to those who may be in a higher tax bracket. While the taxes would have to be paid later, it would likely be at a time when income is lower, so hopefully the tax bracket would be lower as well. Plus, you would be able to purchase 40% more gold. I'm no expert at IRAs, etc., but I believe that is the theory behind it. Also, in an IRA, it is NOT paper. I'd be buying actual gold from my local dealers, and that dealer would send it to Sterling Trust for storage. Then, when I was eligible to liquidate the gold, I would again contact my local dealer to sell it, and direct sterling trust to send the gold back to them.

Seems like a pretty good deal. I can buy more gold now, with pre-tax IRA dollars, and then sell later when I'm in a lower tax bracket.

roadrunner

I'd be buying actual gold from my local dealers, and that dealer would send it to Sterling Trust for storage. Then, when I was eligible to liquidate the gold, I would again contact my local dealer to sell it, and direct sterling trust to send the gold back to them

I don't know how the liquidation of the gold occurs, but you will never get the physical gold back into your possession. You will get paid in paper/check/etc. Since the account is in your name and not your dealer's name, I would assume he would not receive the gold. You should get a paper payment from the trust itself at time of liquidation.

roadrunner

topstuf

A trust can be set up to do anything.
Including return of physical gold if anyone wants to touch such an agreement.
There would be storage and legal fees and a real mess.

But..... after all we've said. Go ahead if you want to.

Bear

I do not see any reason to give gold to Ira.

Let him get his own gold.

coynclecter

Ive had a gold/silver IRA with Sterling for 4 years, Reasonable fees, quarterly statements, easy to contact, no problems. They hold gold coins and silver bars for me.

I made the deal with Tulving and they shipped direct to Sterling.

So far so good.

But then again I havent tried to get my money out yet so the REAL test is yet to be taken.

cohodk

<< <i>For the life of me,

I have never been able to figure out why anyone would want to put GOLD into an IRA.

Your IRA is tax deferrred. Since Gold doesn't throw off any income....why shelter it?

If you go to a shop and purchase an AGE or such, outside of an IRA....it's tax deferred also. And the added benefit is...you have the gold in your possession. Bullion gold is 'INSURANCE' and preservation of wealth...why you would want anyone to have possession of your gold is beyond me. When you really might NEED that insurance...there is an increasing likelyhood that you may not be able to lay your hands on your own possessions if they are "stored in Canada" or "stored anywhere else" for that matter.

Remember, there are relatively few times in this country's history when POSSESSION of assets has been very important.
During the Revolutionary War
During the Civil War
During the Depression

Some might say that it is about time once again. >>




Interesting..... Revolutionary War started in 1775. Civil War started in 1861. Depression started in 1929. There were 86 years between the start of the Revolution to the start of the Civil wars. There were 68 years (86 transposed) between the Start of the Civil war and the Depression. The average of the 2 is 77 years. 77 years in the future from 1861 is 1938---the start of WWII.

So going ahead 68 years from 1938 is 2006. Pretty close to the stock market top in 2007. Or if we use the beginning of the US involvement in WWII is 2009

Or if we use the end of WWII (1945) and add 68 years, we get 2013. Which is pretty darn close to the Mayan prediction of the end of the world 12-21-2012.


Just rambling.

coynclecter

<< <i>I have never been able to figure out why anyone would want to put GOLD into an IRA.
Your IRA is tax deferrred. Since Gold doesn't throw off any income....why shelter it?

>>



First off I saved the Income tax I would have paid on the income that I put into the IRA. I have 25-30% more in the account than I would have if I paid tax and then bought the gold.

2) I have gold which is worth twice what I paid for it (2005) versus stocks which would be worth half what I paid for them.

So in 2005 I put took 5000 and put it in a gold IRA at 430 an ounce. Thats 11.5 ounces currently worth about $10,000.
OR
I made 5000 net 3500 after tax, bought BoA at $44 and got 80 shares currently at 11 per or about $900.

jmski52

I have 25-30% more in the account than I would have if I paid tax and then bought the gold.

IRAs were promoted heavily on the unquestioned presumption of being in a "lower" tax bracket when you retired. Who knows what the tax rates will be then? In today's world, the actual percentages could change drastically, depending upon the "crisis of the moment". Don't worry, the tax is coming when you take it out of the IRA - it's only a question of how bad it gets.

The real calculation is not the tax itself, but the difference between the tax on any gains between now vs. whenever you do take it out. That tax bite is coming. Pre-tax assets in an IRA or other tax-deferred accounts are only "funny money". It feels theoretical until you are faced with the actual tax payment.

What they didn't tell you is that your stock and bond earnings in the IRA which were so neatly tax-deferred were also subject to a market meltdown in exactly the same time period in which Social Security would be insolvent.

I think that you've only got it half-right. Getting your money out of paper and into gold was the half that you got right. Leaving the gold visible and subject to the regulatory whims of a bunch of corrupt politicians and bankers is the half that's probably still wrong.

I don't worry too much about you, coynclecter............I've read enough of your posts to know that you aren't going to be drinking the koolaid, but I make these comments as an admonition to all.

mhammerman

JMHO

timcoin

<< <i>JMHO


>>



Hard to argue with that

pmac

<< <i>

<< <i>

<< <i>The biggest difference between paper gold and physical gold is that when you sell, the government knows what profit you made with the paper gold. >>


Help me out. If you have physical gold in an IRA and it's time to redeem it, you pay differred taxes on the whole amount, just like any other IRA, right? How does the government not know or care about profit? Do you pay more tax on the profit? Just being the uneducated me, I guess. >>



When you have gold in an IRA, you don't have physical possession of the gold. You have a PAPER receipt. Big difference. When you cash in your IRA, the IRS knows all about it so you'll have to pay taxes on any profit. >>


Again I ask, don't you have to pay tax on all which is redeemed, not just the profit? Is there a different tax level for profits than the initial investment (which you haven't paid taxes on yet)?
Another question - if you paid Uncle Sam the taxes, could you then take posession of the gold? Can I sell the gold to a dealer (not just the original seller) who would then pay a portion of the sale to Uncle Sam?

jmski52

Again I ask, don't you have to pay tax on all which is redeemed, not just the profit?

The principal in an IRA is income you earned for which the taxes have been deferred. So, when you remove the principal it counts as ordinary income to be added on top of what you earned that year in arriving at your marginal tax rate. The profits are also ordinary income and contribute to your ordinary income the year that they are taken as well.

However, some IRA contributions might have been made as non-deductible contributions (after 401Ks and Roth IRAs came into existance). If no deductions to your income were taken originally, then only the profit is taxable. If you only cash in a portion of your IRA, and some of it is non-deductible and some of it was a deductible contribution, then the taxable portion is simply pro-rated as a percentage of the whole. You have to continue keeping track of your basis if you leave some money "in" which continues to generate profits or interest.

Another question - if you paid Uncle Sam the taxes, could you then take posession of the gold?

Why bother with setting up an IRA in that case? My understanding is that gold in an IRA cannot be touched by the owner.

Can I sell the gold to a dealer (not just the original seller) who would then pay a portion of the sale to Uncle Sam?

I don't think that any dealer who isn't being paid to manage your IRA is going to be willing to deal with your tax filings. If the gold is in an IRA and you sell it to Dealer #2, your IRA fiduciary would have to issue a statement to you, and you would be responsible for the tax filing.

mrearlygold

If you're ok with paying premiums year after year after year why not:




+ Insurance and an Alarm system

coynclecter

<< <i>Another question - if you paid Uncle Sam the taxes, could you then take posession of the gold? >>



If you send a check to your IRA for the spot price of the PMs you have then you could receive them and only pay the taxes when you take a distribution from the account. In the mean you could put the IRA money in shares of FNMA or BofA and sleep real well at night.

jmski52

you could put the IRA money in shares of FNMA or BofA and sleep real well at night

Not for long, my friend. Not for long. The question arises as to why you would trust either of those entities or the people who are involved in keeping them afloat.

coynclecter

I was joking.

jmski52

I was joking.

jmski <---------------------------------------idiot

streeter

when you mentioned BAC......my first thought was their commercial lending portfolio

I'm relieved you instituted the ...JOKE clause.