We have been approached by a number of retirement investors that have claimed that they have been marketed retirement plans to buy and hold gold in a foreign bank, but this is in violation of the IRS prohibited transaction rules
Miami, FL (PRWEB) October 01, 2013
IRA Financial Group, the leading provider of self-directed Solo 401(k) Plan announces the release of an Investor Alert aimed specifically at retirement investors being marketing qualified retirement plans, such as a Solo 401k Plan to purchase and hold foreign gold. The IRS, pursuant to Internal Revenue Code Section 408, set forth specific rules for purchasing and holding precious metals, such as gold.
Internal Revenue Code Section 408(m) lists the type of precious metals and coins that are permitted investments using IRA funds: Pursuant to Internal Revenue Code Section 408(m), the following are the types of precious metals and coins that can be purchased with retirement funds:
- One, one-half, one-quarter or one-tenth ounce U.S. gold coins (American Gold Eagle coins are the only gold coins specifically approved for IRAs). Other gold coins, to be eligible as IRA investments, must be at least .995 fine (99.5% pure) and be legal tender coins.
- one ounce silver coins minted by the Treasury Department;
- any coin issued under the laws of any state;
- a platinum coin described in 31 USCS 5112(k); and
- gold, silver, platinum or palladium bullion (other than bullion that is made into a coin) of a certain fineness that is in the physical possession of a trustee that meets the requirements for IRA trustees under Code Sec. 408(a).
The Technical and Miscellaneous Revenue Act of 1998 allowed IRA owners to invest their IRA assets in certain platinum coins as well as certain gold, silver, platinum, or palladium bullion provided the metals are held in the physical possession of the financial organization or depository. With respect to state minted coins, the coins must be held in the possession of a third-party other than the IRA holder. The Technical and Miscellaneous Revenue Act of 1998 does not state that the third-party must be a bank, but the holder must not be the IRA holder. Regarding American Eagle coins, there does not seem to be a "physical possession" requirement as precious metals or a restriction on possession by the IRA holder as in the case of state minted coins.
“We have been approached by a number of retirement investors that have claimed that they have been marketed retirement plans to buy and hold gold in a foreign bank, but this is in violation of the IRS prohibited transaction rules, “ stated Adam Bergman, a tax attorney with the IRA Financial Group. According to Mr. Bergman, the Internal Revenue Code requires that precious metals, such as gold beheld in the physical possession of a U.S. trustee, which is defined as a U.S. bank or depositor. Hence, holding precious metals, such as gold in a retirement plan in a foreign bank would violate the IRS prohibited transaction rules. “
According to the IRA Financial Group Investor Alert, any retirement investor being marketed a retirement plan, such as a Solo 401(k) Plan to purchase precious metals, like gold and hold the gold at a foreign bank, such be cautious of such a plan and be aware that the investment would likely trigger an IRS prohibited transaction.
The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP.
IRA Financial Group is the market's leading “checkbook control Solo 401(k) Plan provider. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.
To learn more about the IRA Financial Group please visit our website at http://www.irafinancialgroup.com or call 800-472-0646.