First I want to thank Little Fish for offering more explanation to readers on economics and finance. I appreciate the opportunity to respond to the questions and concerns in this post in hopes of providing clarity on the IRA LLC concept and our company.
We at Perpetual Assets are staunch free market capitalists. We do not like to be handcuffed and would never require anyone to purchase metals from our company. Most of our clients do because we have earned their trust, are competitively priced, executed their IRA LLC conversion perfectly, and provided excellent service along the way. In addition, one does not have to sell to us either. There are no other charges for taking physical possession. Shipping is even free on most large transactions.
We provide an extensive amount of information on the subject to our clients throughout the process, all of which back up the structural investment framework of the IRA LLC. This includes legal affidavits, concrete do’s and don’t’s, tax code analysis, court cases, and IRS field advisory statements. I am making all of this information available to the public on a single web page that we will provide in the coming days.
I would argue that defunding even a relatively small IRA could have harmful ramifications. In this article I give an example of a $100k IRA cash out. Depending on one’s tax bracket you can see how even a $30k cash out could have significant taxes and penalties, making the $1895 setup fee a viable option to get your hands on the most metal possible. Of course, at some point (currently age 70 ½) you will be forced to take taxable distributions from your IRA LLC. Yes, you can literally pull out those shiny gold, silver, or platinum eagle coins as IRA distributions years later. Yes, it will be a taxable distribution, but pulling out $5,000 value in silver per year is a lighter blow to your taxable income than cashing out a full $30,000+ IRA.
There should be no concern about the IRS considering this an example of ‘hiding’ assets. As manager of the LLC the individual is the fiduciary of the assets owned by the LLC. He or she is in complete control of the storage of said assets. Our favorite three-letter regulatory bodies are not alerted when one executes this process. All they know is that John Doe has rolled his IRA, SEP, Simple or 401k over to a self-directed IRA platform with one of the largest and oldest IRS-compliant custodians in the marketplace. In the event of an IRS audit, the individual is responsible to furnish the assets of the LLC. That’s when Mr. Doe has to dig a hole in the ground and knock the dust off those IRA LLC owned coins and prove he has not spent or otherwise personally used those assets. The IRS does not know you hold coins in your hand unless you are audited, and again we are not hiding anything, and certainly not advertising it. The only reporting requirement is an annual valuation of the LLC assets (dollar amount) to the custodian as they update their total assets under management.
In the end, this is all about control and choice. Legally, as a firm we can never endorse non-compliance. That being said, if some mid- to late- 30s Germany draconian measures begin to show face, regardless if they threaten gun rights, metals, retirement accounts, or personal freedoms, our goal is for our clients to have a choice and assets within 50 feet of the client’s possession; we give you that liberty. As we occasionally tell clients, we try to protect you from everyone, except yourself. – Will Lehr