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Buying Precious Metals with a Solo 401k Plan

Just like a Self Directed IRA, a Solo 401K Plan or Individual 401k Plan is permitted to invest in certain platinum coins as well as certain gold, silver, platinum, or palladium bullion provided the coins are held in a financial organization. However, unlike an IRA, a Solo 401K is not governed by Internal Revenue Code Section 408(m), which restricts the types of an investments an IRA can invest in. Thus, a Solo 401k Plan can invest in almost any type of precious metal or coin as long as it is permitted by law. To this end, a Solo 401k or Self Directed 401k is permitted to purchase life insurance contracts, whereas Section 408(m), restricts an IRA from purchasing life insurance contracts.

The advantages of using a Solo 401K Plan with “checkbook control” to purchase precious metals and/or coins is that the metals and/or coins can be held in the name of the 401K Plan at a financial organization (at any local bank) safe deposit box eliminating depository fees. The IRS requires that the metals/coins be held at a custodian, but it does not require that the metals/coins be held at a separate depository. For someone looking to hold precious metals in a more cost effective manner, the Solo 401k Plan offers the perfect platform.

Purchasing gold, silver, palladium, or coins with a Solo 401k Plan will allow you to enjoy asset appreciation without any tax. In addition, as trustee of the Plan you will have the authority to make investment decisions on your own without requiring the consent of any custodian.

Thus, a Solo 401K or Self Directed Solo 401K Plan will allow you to purchase precious metals tax-free as well as help you eliminate the expense and delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

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Posted in Solo 401(k)

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