Augusta Home Delivery IRA. Investment Protection Worth Its Weight in Gold and Silver

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1 Augusta Home Delivery IRA Investment Protection Worth Its Weight in Gold and Silver

2 Augusta Home Delivery IRA Priceless Control over Your Retirement Savings This little-known retirement account is comprised of physical gold and silver coins delivered to your home where you can See, Touch & Hold them. You decide where to store your precious metals with help from your legal and financial advisors according to IRS rules and guidance on storage, so you fully understand the risks. Augusta is a leading provider of this type of IRA and a trusted partner who can help you make smart gold and silver investment decisions then walk you easily through the steps to make it happen. We ll make your gold and silver investing experience easy and personal. How Gold and Silver Protect Your Future It s not easy to watch the market have its way with your hard-earned money. Stocks and bonds are at the mercy of world events and political whims, and managed funds are controlled by people you don t know. The Great Recession proved no investment is guaranteed. What can you do? The secret to protecting retirement investments in this uncertain environment is to diversify, and you can t get better diversification from paper-based investments than physical gold and silver in a completely different investment class. Gold and silver in their physical form offer a genuine store of value and tend to hold their value or increase when other investments are decreasing, and they provide an enduring financial legacy for your loved ones. The Augusta Precious Metals Promise Your personally assigned Augusta team will take time to answer all your questions, then help you select gold and silver options to fit your needs and complement and balance your other investments. Finally, our Customer Care Department will walk you through a proven streamlined, inexpensive process for setting up your account. We do 95% of the legwork for you, including communicating with account custodians. Take control of your retirement savings TODAY! Ask to speak to a friendly, knowledgeable Augusta account executive. Product Summary Inflation-hedging physical gold and silver coins Precious metals delivered to you and stored close by True, uncorrelated diversification and store of value Enduring, intrinsic value to support your financial goals Free shipping and insurance Expert perspective and personal service Best prices in the industry, no hidden fees 2

3 7 Easy Steps How an Augusta Home Delivery IRA Works The Augusta Home Delivery IRA is a self-directed IRA as defined in U.S. tax code. The coins in this physical gold and silver IRA are held in an LLC, an investment structure acknowledged by the IRS as valid. (See more details in the following pages and in Internal Revenue Code Section 408, particularly 408(m) regarding precious metals.) Contact Augusta We assign a personal account executive to follow you through the process. This person helps you fill out an application to open a new selfdirected IRA with a new custodian and prepare to transfer funds. Transfer Funds At your direction, your new custodian requests a rollover of your retirement funds from the current custodian of your IRA, 401(k), 404(b), SEP IRA or Keogh plan. The transfer is tax-free and penalty-free. Create LLC Augusta s recommended attorney creates a Limited Liability Company (LLC) for your new self-directed IRA and appoints you sole manager. The LLC conforms to all rules and regulations for self-directed IRA LLCs. Purchase LLC You sign documents to instruct your new self-directed IRA to purchase the LLC. The new self-directed IRA owns the LLC. Open Checking Account You open a checking account in the name of your LLC at your preferred, qualified bank. Your new custodian wires funds into your new LLC checking account in the amount you designate. Existing IRA / 401k IRA LLC Checking Account 6 7 Buy Gold & Silver You use your LLC s checking account to buy gold and silver. Your personal Augusta team helps you build your precious metals portfolio. Take Delivery Precious metals are delivered to you, then you work with your legal and financial advisors to decide where to store them according to IRS rules and guidance on storage. There is a great deal of misinformation about this product in the marketplace. Ask your Augusta expert to help you uncover the facts! 3

4 Getting to Know the Augusta Home Delivery IRA Many Augusta clients have carefully vetted the home delivery precious metals IRA with their own attorneys. We encourage every client to do so. Other than storage, this account is much like other selfdirected IRAs and IRA LLCs containing real estate and other unconventional assets. See what Augusta customers think in Reviews at Augustapreciousmetals.com. You ll see many, many customers give us 5-star reviews the highest possible! Investment Profile: Augusta Home Delivery IRA* Asset description Account type Legal structure Funding Min/max investment Storage requirements Accessibility/liquidity Costs/fees Physical gold and silver coins preselected by Augusta for their potential; IRS-approved coins include American Gold Eagles and American Silver Eagles (1 oz, ½ oz, ¼ oz and 1/10 oz), as well as certain coins minted by other nations Self-directed IRA, defined by tax code and governed by IRS rules; same tax benefits and penalties as other retirement accounts Augusta team helps you set up an LLC owned by your IRA; must follow IRS rules and U.S. tax code on setup/terms of the IRA and on storing where a custodian maintains physical possession Purchase using funds from your LLC bank account $25,000 minimum, no maximum limit Work with your legal and financial advisors to decide where to store according to IRS rules and guidance on storage; there s no IRS guidance on storage of some precious metals, but Augusta s attorneys believe it s wise to keep all IRA precious metals in a safe deposit box at a U.S. bank in the name of the IRA s LLC Gold and silver stored at home or in a safe deposit box are always close at hand; as with any IRA, early withdrawal can result in additional taxes and penalties No hidden Augusta management fees or setup fees; see fee sheet for breakdown of custodial and LLC fees * For more FAQs about the Augusta Home Delivery IRA, visit Augustapreciousmetals.com. 4

5 Is This a Common Investment Account? Sophisticated investors have used self-directed IRAs for a very long time for real estate and physical precious metals. Until recently, the home delivery account has been relatively uncommon. We believe this is because it has taken time for investors to realize it s an option. Augusta began selling self-directed IRAs specifically to help Americans benefit from this important opportunity. The Future of Home Delivery Gold and Silver IRAs More providers are offering home delivery gold and silver IRAs, and we believe this option will soon enter the mainstream. This type of IRA can be an important tool for investors who want the strategic portfolio benefits offered by physical precious metals and greater asset control they can t get with traditional retirement plan structures. Where to Store Your Gold and Silver Your home delivery gold IRA will own a Limited Liability Company (LLC) you create for your self-directed IRA a legal investment structure specifically acknowledged as valid by the Internal Revenue Service (IRS) and tested in court. You must work with a custodian that specializes in administering self-directed IRAs to roll over funds and accept the precious metals into the account. Investors have two choices for storage of physical precious metals in a home delivery gold or silver IRA: Home storage. Keep American Eagle gold and silver coins in your home. We recommend working with your own legal and financial advisors to determine eligibility of assets for storage under IRS rules and guidance on storage and to ensure compliance and preserve your tax advantages. Sidestepping rules or mishandling account assets could result in penalties and taxes. Safe deposit box storage. Take delivery of precious metals at your door, then transfer to a trustee of your choice usually a bank. As with home storage, we recommend you work closely with your legal and financial advisors to determine whether the trustee and depository are qualified under the tax code. 5

6 The Augusta Advantage Augusta Home Delivery IRA VS Conventional Retirement Accounts Defer income taxes on income and growth until retirement. Defer income taxes on income and growth until retirement. Make qualified early withdrawals. Make qualified early withdrawals. Make direct IRA contributions. Make direct IRA contributions. Roll over a traditional IRA, Roth IRA, 401(k), 403(b), SEP IRA or Keogh into your new gold or silver IRA. Invest in various paper assets, like stocks and bonds Manage your own IRA. Buy and sell using your IRA LLC checking account. Authorize faceless experts to manage your savings. Cut fees to a minimum. Pay recurring fees, such as professional management and advisory fees. Buy coins and bullion at competitive market prices, with no hidden fees. Pay transaction fees for most fund investment changes. Own physical, inflation-hedging gold and silver. Claim digital shares in pre-selected stock, bond and other mutual funds. Physical gold and silver delivered to you, and you decide where to store it with your legal and financial advisors according to IRS rules and guidance. Yield to unknown honesty and liquidity of a trustee. Own investments with intrinsic value, usually resistant to inflation and market meltdown. Lock into investments vulnerable to inflation and market meltdown. Hold real metals with enduring value in a worst-case social/political crisis. Rely on paper investments that could be worthless in a worst-case social/political crisis. 6

7 Augusta Precious Metals: Home Delivery IRA Pioneers Augusta is known for bringing home delivery gold IRAs into the mainstream, making them available to anyone who wants to take advantage of the strategic portfolio benefits associated with owning precious metals, while retaining the highest possible level of asset control. This brochure just one of many educational pieces offered by Augusta was created to help teach investors about the benefits of owning gold and silver and the unique IRA account options available to them. Your Partner in Retirement Savings Protection The family behind Augusta has been in the gold and silver business for more than 40 years. Our knowledgeable, friendly account executives will listen to you first and only then make recommendations to fit your situation. Augusta s process department does 95% of the legwork to complete your purchase, communicate with your custodian, send your metals to you or a secure depository of your choice, and help you with distributions. Would you like to store your gold and silver in a more customary location? Ask about the Augusta Gold & Silver IRA and get your gold and silver delivered to a secure depository of your choice, where you can make arrangements to go see, touch and hold it in your hands. Or consider a cash purchase and store precious metals anywhere you like. Augusta customers have expressed their satisfaction with our service by providing hundreds of five-star reviews. We also are proud of our BBB A+ rating and AAA rating from the Business Consumer Alliance. Call today and let us help you protect your savings! 7

8 On the Legality of Home Delivery IRAs Self-directed IRAs were long ago tested and confirmed as valid investments under the law. Below is an introduction to the pivotal court case and IRS memos that apply. Legal History of Self-Directed IRAs 1996 Swanson vs. Commissioner (106 TC 76) James Swanson created a special-purpose business entity owned by his IRA. He made himself the non-compensated manager of this business entity, allowing himself full investment control. In other words, his structure mirrored that of the IRA LLC discussed above. The IRS challenged Swanson, claiming that using a special-purpose entity to manage his own IRA was a prohibited transaction. The judge found for Swanson (see 106 TC 76 for details). Investing in a self-directed IRA through a newly created entity has been recognized ever since IRS Issues Field Service Advice (FSA) Memorandum The IRS educated its agents about the legality of self-directed IRA LLCs via FSA In essence, the memo reiterated the Tax Court s finding in the 1996 Swanson case that an individual can use his or her self-directed IRA to purchase all the shares in his or her newly formed LLC without self-dealing TC Memo Reaffirms Self-Directed IRA LLC Legality After retirement, Terry Ellis rolled over $300,000 from his 401(k) into a self-directed IRA. He then established an LLC, CST LLC, and transferred the $300,000 from the IRA to purchase CST LLC. He used the CST LLC entity as the legal owner of a used car business. The IRS argued that this violated Section 4975 of the tax code, which prohibits self-dealing. The court s decision in TC Memo confirmed that a self-directed IRA can fund a newly established LLC to buy and sell assets. The IRS informed its agents of this fact in a Field Service Advice (FSA) memorandum shortly after. Selfdirected IRA LLCs are, therefore, recognized by the Tax Court and the IRS as legal No clear IRS guidance has been provided specifically as to where precious metals in a self-directed physical gold or silver IRA must be stored. However, Augusta asked eight attorneys to analyze the use of precious metals in a self-directed IRA and storage at home or in a safe deposit box. They all came to the same conclusion: it s legal for certain coins, if IRS rules are followed. See details at right. Can we expect IRS clarification? One of Augusta s contracted attorneys, Dawn Delia, contacted the U.S. Internal Revenue Service many times about storage of this product. She was told the IRS recognizes the issue and would be providing guidance. After the presidential election, however, the timing of such guidance became uncertain. Ask your Augusta account executive about the possible outcomes of future IRS guidance on this issue. 8

9 Eight Attorney Opinions We asked eight attorneys to examine the home delivery gold/silver IRA and write opinion letters about it. All eight completed extensive research on the account structure and wrote opinion letters for us outlining the reasons they believe it s legal as long as the rules are followed. Read excerpts below, and read all eight complete response letters at Augustapreciousmetals.com. Important note: You cannot rely on these opinion letters as legal advice, because they were created specifically for Augusta. We strongly advise discussing the home delivery IRA with your own tax and legal advisors. IRS approved coins under I.R.C. 408(m)(3)(A) may be stored at home. Precious metals and certain coins under I.R.C. 408(m)(3)(B) may not be stored at home and must be stored in a depository, bank safe deposit box or with an IRA custodian. Dawn Delia, Delia Law (affiliated with Augusta we recommend this attorney to create your LLC) In contrast to the strict storage requirements for approved precious metals set forth in 26 U.S.C. 408(m)(3)(B), 26 U.S.C. 408(m)(3)(A) omits any such storage restrictions for American Eagle Coins, presumably permitting them to be stored in the physical possession of the self-directed IRA ( SDIRA ) account owner, provided the coins are being held solely for the benefit of the SDIRA and not for any personal benefit or other benefit. Gordon Law Group It is therefore my opinion that where a corporation or LLC established under Swanson holds I.R.C. 408(m)(3)(A) coins (including American Eagle coins) in any location (including with a trustee), the IRA account holding the shares or membership interests thereof would be respected as a valid IRA, assuming all other formalities are met. Cyrus Sanai, Attorney at Law Coins approved under the Internal Revenue Code (section 408(m)), namely American Eagles, can be stored at home, provided they are not used in prohibited transactions, and should be held in the name of the IRA LLC. Christopher B. Johnson, Attorney at Law (Mr. Johnson was previously affiliated with Augusta and wrote an article about this product for Law360.com.) Is the Home Delivery IRA Right for You? We suggest you carefully study the options and compliance steps with your personal legal and financial advisors to fully understand the risks. 9

10 Augusta Home Delivery IRA FAQ Can I store my IRA precious metals at home? Attorneys retained by Augusta (see Attorney Opinion Letters at Augustapreciousmetals.com) believe certain precious metals, namely American Eagle coins, may be stored at home in accordance with the Internal Revenue Code (26 U.S.C. 408(m)(3)(A)). However, Augusta s attorneys believe it is wiser to store metals in a safe deposit box in the name of the LLC at a U.S. bank, because storing precious metals held in an IRA at home has high risks of inadvertently engaging in a prohibited transaction and because the IRS has not provided clear guidance on the issue. Can I store my IRA precious metals in a bank safe deposit box? Attorneys retained by Augusta (see Attorney Opinion Letters at Augustapreciousmetals.com) believe all precious metals held within an IRA may be stored in a bank safe deposit box in the name of the LLC because, in their opinion, such storage meets the code requirement that the precious metals be stored in the physical possession of a trustee. The IRS has not issued clear guidance on whether bank safe deposit box storage would meet the requirement that the precious metals be stored in the physical possession of a trustee, so it is important that you fully understand the risks associated with this type of storage. Because you cannot rely on the opinions of Augusta s attorneys, it is very important that you seek your own legal advice on this matter. 10

11 What are possible outcomes if the IRS issues guidance on this type of IRA and storage options? According to attorneys Augusta consulted, the following are the likeliest outcomes: 1) the IRS might confirm home and safe deposit box storage complies with the tax code; 2) the IRS might say safe deposit box storage is legal, but home storage is not, requiring clients to move all IRA precious metals into a safe deposit box; 3) the IRS might say neither home nor safe deposit box storage are in compliance, and clients might have to work with custodians to move precious metals to a depository. The IRS could possibly grandfather in existing clients, meaning the clients would not have to pay taxes or penalties. Or they could deem that home delivery investors must pay taxes and penalties. What, exactly, are the risks? In addition to the risk of future IRS clarification, our attorneys say owners can create risks if: 1) the precious metals are not stored properly; 2) IRA precious metals are used for any other purpose, including being sold to purchase something else; 3) the IRA is not administered through a qualified custodian; or 4) the LLC is not set up correctly. Mishandling the account, including physical assets, could constitute a prohibited transaction, and the owner could lose tax benefits and face significant taxes and penalties. Why are some investors reluctant to take advantage of the flexibility offered by a home delivery IRA? We believe hesitation to invest in a home delivery IRA, for some investors, stems from these facts: 1) the product hasn t been in the mainstream until recently, although self-directed IRA LLCs, or similar structures, have been used by investors for 20 years; 2) the IRS hasn t given specific, clear guidance on storage at home or in a safe deposit box; and 3) no court cases yet confirm storage of physical gold or silver in an IRA at home or in a safe deposit box. Although some providers argue that home and safe deposit box storage are illegal, we don t expect IRS guidance on storage any time soon. The LLC structure and holding of certain precious metals in an IRA is not disputed. How can I be sure my investment complies with the law? Augusta Precious Metals recommends all customers work with appropriate legal and financial advisors to ensure they are acting in full compliance with the law, including the matter of asset storage. Legality of the LLC structure at the foundation of the home delivery IRA has been confirmed according to the IRS. The LLC structure was challenged in court and found to comply with the tax code. Why do investors like this type of investment? Investing in physical gold and silver is a way to broaden investment selection and gain more control than with other retirement plan structures. Gold and silver offer effective uncorrelated asset diversification outside of traditional stocks, bonds and mutual funds. The value of gold and silver tends to go up when other investments are going down. Precious metals are reliable stores of value that have a tendency to hold their own or appreciate during adverse economic conditions. 11

12 Exceeded my expectations Augusta has exceeded my expectations immensely. Not only do they have the best prices, but they have the ability to provide me with various options for precious metals in my portfolio. I went with the home storage gold. It simply made the most sense, holding my IRA personally and having control over it at all times. S. Solouki Helpful first experience This was my first experience buying silver. The person who helped me was very professional. I would recommend Augusta Precious Metals and especially the person that was so helpful to me. Gail C. Outstanding Service and Support They strive to provide the best deals, honest answers, and treat you like more than just an account. They treat you like a long-term friend and client with your best interest first. Thanks all the great staff at Augusta Precious Metals. Bart A. Augusta Home Delivery IRA Investment Protection Worth Its Weight in Gold and Silver The Augusta Home Delivery IRA allows you to have gold and silver delivered to you. Use these hard assets to gain more control over your savings. Augusta is a precious metals provider known for deep experience, exceptional and transparent customer service, and the lowest prices in the industry. Call today to speak to your personal Augusta account executive IMPORTANT INFORMATION: Augusta Precious Metals ( Augusta ) does not provide legal, tax, or investment advice. Nothing of the foregoing, or of any other written, electronic or oral statements or communication by Augusta, its representatives, or attorneys, is intended to be, or should be relied on as, legal, tax or investment advice, statements, opinions or predictions. Prior to making any investment decisions or opening a home delivery gold or silver IRA, it is important you consult with your own chosen legal and financial advisors for advice. Although Augusta has consulted with tax counsel to assess the risks associated with home delivery and storing certain coins and precious metals at home or in a bank safe deposit box and is relying on that advice, it is important to recognize that the IRS has not offered clear legal guidance on home delivery or home storage or bank safe deposit box storage of American Eagle coins and other precious metals. If your home delivery gold IRA is not set up properly, if you engage in a prohibited transaction (i.e., withdrawing any gold or silver before retirement to use for any other purpose), or if it is determined that home delivery or home or bank safe deposit box storage are not permitted by the IRS, you could lose your tax exempt status and have to pay taxes and penalties. Augusta does not assume liability for investors gains or losses in any investment or market, or any other liabilities incurred by investors in connection with the use of our services. Investors in precious metals are ultimately responsible for their own purchasing decisions. As with any investment, past performance might not predict future returns. The price of precious metals fluctuates over time and investors might lose money. All investors should seek out the best information and advice to make the right decision for themselves. Market prices change more quickly than the Augusta Precious Metals website can be updated, and current prices could be higher than the website s listed prices. Always call for exact, current prices. All product prices are locked in only at the time a transaction is finalized and confirmed. Augustapreciousmetals.com 8484 Wilshire Blvd., Ste. 515 Beverly Hills, CA Augusta Precious Metals. All Rights Reserved