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A Couple Stored IRA Gold at Home. They Owe the IRS More Than $300,000.

Updated: Oct 26, 2023

It can be dangerous to invest retirement-plan funds in esoteric assets without proper guidance. A husband and wife in Rhode Island have learned that lesson the hard way.

It’s official: Owners of individual retirement accounts with assets invested in gold and silver coins can’t store them in a safe at their home. So ruled the judge in a recent Tax Court case, Andrew McNulty et al. v. Commissioner. The decision will cost Mr. McNulty and his wife Donna dearly—taxes of nearly $270,000 on about $730,000 of IRA assets, plus penalties likely to exceed $50,000.

The ruling disallows a scheme that was heavily promoted several years ago, when radio and internet ads touted the benefits of using IRA assets to buy gold and silver coins and then store them at home or in a safe-deposit box. Savers who have bought into them or are considering such a move should reconsider right away.

At the end of the trial, the judge imposed accuracy penalties of 20% of the McNultys’ tax understatement under Section 6662(a) of the tax code. Based on the facts in the decision, the penalty comes to about $54,000.

The McNulty case has a broader lesson as well: It’s a cautionary tale showing how dangerous it can be to invest retirement-plan funds in alternative assets without proper guidance. “Good tax advice may appear expensive, but it’s not as costly as blowing up your IRA,” says Warren Baker, an attorney with Fairview Law Group in Seattle who specializes in alternative-asset IRAs.




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