Precious metals are considered one of the safest investments available, yet one of the more complex. While they provide some security against losses in other assets like stocks and bonds, precious metals should not be seen as a replacement investment strategy.
As such, many have turned to IRAs and LLCs to store precious metals – but these strategies may not always be the most suitable option.
Taxes
If you intend on holding precious metals within an LLC, certain tax considerations must be addressed. You must understand how these items are classified for tax purposes and whether or not they qualify for the “collectibles” rate.
The IRS levies a maximum collectibles tax rate of 28% on gold and silver bullion investments, higher than the 15% long-term capital gains tax which typically applies to most investments and taxpayers.
Additionally, the IRS views gold and silver as collectibles instead of traditional assets like stocks or bonds; any profits from their sale are subject to a 28% collectibles tax.
Consideration should also be given if you wish to hold any products within an LLC and protect them from creditors, but first consult your accountant or attorney prior to making purchases.
Asset Protection
Asset protection strategies for limited liability companies (LLCs) aim to protect their assets from judgments, lawsuits, and unforeseeable events. Furthermore, asset protection strategies may help with estate planning, reaching financial goals, and maintaining business viability.
LLCs have become a popular way of protecting assets as they prevent creditors from seizing the business or its assets directly, forcing them instead to obtain a charging order from the court before receiving distributions from the LLC.
But creditors may still gain access to your business assets through various avenues, so it is vitally important that when creating an asset protection strategy for your company you take this into account.
Establishing a separate LLC for each property ensures that a lawsuit will only impact those properties contained within them – thus helping prevent creditors from seizing all your real estate investments at once.
Chain of Title
Chain of Title documents detail the history of ownership for any piece of property or asset – land, real estate, vehicles or even businesses.
Each time property changes hands, a link in the chain is formed ensuring there is no confusion as to who owns what and when.
As years pass, these documents have proven invaluable tools for title agents and homebuyers to track how a piece of land has changed hands over time and identify any issues which may hinder their current owners from using it to its maximum capacity.
An error in recording a deed can have serious repercussions for its chain of title; typically, those holding legally recorded deeds will gain priority over anyone claiming property without one.
Distributions
Precious metals are an ideal investment choice for many reasons, particularly their perceived status as “safe haven” assets that offer protection in times of economic stress or panic.
However, just like stocks and bonds, their price can fluctuate widely, so if you’re considering including precious metals in your retirement portfolio it is crucial that you understand all risks involved.
IRAs can be an excellent place to store precious metals, as they’re tax-advantaged and offer asset protection. But it is important to keep in mind that any precious metal IRA must adhere to all the same rules and requirements as any other IRA account.
