"The Internal Revenue Service (IRS) is the Agency that carries out the Internal Revenue Code (IRC), Title 26 of the United States Code. The Agency also creates regulations as a means of carrying out or interpreting various Code sections. These are called the “Code of Federal Regulations” or “CFRs.” Finally, the Agency issues Letter Rulings, Advisory Opinions and other publications that allow taxpayers a more detailed version of the applicability of Regulations and Code Sections. The IRS has carefully outlined in both Code and regulation what a retirement plan may not do. Thus, the IRS has jurisdiction over whether a particular transaction violates the IRC. However, under Presidential Reorganization Plan No. 4 of 1978, effective December 31, 1978, the authority of the Secretary of the Treasury (IRS) to issue interpretations regarding section 4975 of the Code (prohibited transactions) has been transferred to the Secretary of Labor (DOL) and the Secretary of the Treasury is bound by the interpretations of the Secretary of Labor pursuant to such authority." (Source)
...There is no specific Code provision or regulation prohibiting an IRA from owning the stock of a FSC. The type of investment that may be held in an IRA is limited only with respect to insurance contracts, under section 408(a)(3), and with respect to certain collectibles, under section 408(m)(1).
This is consistent with IRS Private Letter Ruling 8241079 dated February 25, 1982, concluding in favor of a retirement plan investing in an unregistered bond. Finally, investment of IRA funds into a business entity is permitted by interpretive bulletins issued in 1975 and the publication of final regulations following these bulletins that was codified on November 13, 1986. While it is conclusive that an IRA can own an LLC interest or a promissory note, this is only the first step of the legal analysis. (Ibid)...
2. Prohibited Transactions
IRC § 4975(c)(1) states that a “prohibited transaction” includes any “direct or indirect”:
* sale or exchange, or leasing, of any property between a plan and a
disqualified person;
* lending of money or other extension of credit between a plan and
a disqualified person;
* furnishing of goods, services, or facilities between a plan and a
disqualified person;
* transfer to, or use by or for the benefit of, a disqualified person of
the income or assets of a plan;
* act by a disqualified person who is a fiduciary whereby he
deals with the income or assets of a plan in his own interest or
for his own account; or
* receipt of any consideration for his own personal account by any
disqualified person who is a fiduciary from any party dealing with
the plan in connection with a transaction involving the income
or assets of the plan.
Thus, as long as IRA LLC Strategy does not involve a “disqualified person,” no “prohibited transaction” can be triggered. This term generally includes fiduciaries, employers, employees, family members and entities in which equity interests in excess of fifty (50%) percent are owned by the IRA owner (or family members). (Ibid)
The concept is relatively simple. An IRA can own a Limited Liability Corporation (LLC). Theoretically, the LLC appoints the owner of the IRA as its managing member. As long as all monies and assets remain within the LLC, they remain tax-deferred.
In other words, John creates an LLC with his IRA as the beneficial owner and himself as the manager of the LLC. As manager, he can choose what to invest in and chooses gold and silver. These become the assets of the LLC and are also owned by the IRA. Since they are owned by the IRA they grow tax-deferred. Since John is the managing member of the LLC he can decide where to store the gold and silver for and in behalf of the LLC.
I am not a CPA so I suggest you run this scenario by one. It just might prove to be the means of taking possession of your gold and silver through a tax-deferred vehicle. Just make sure your CPA doesn't have a vested interest in keeping you and your money in the stock market or other dollar-based asset.
