Can You Invest in Gold Coins in Your IRA?

Most IRA custodians don't allow investments in gold coins, but there are exceptions. To own gold, whether in coins or bullion, an IRA requires a true self-directed IRA offered by a few custodians. With American Gold Eagle as the only exception, gold bars for inclusion in an IRA account must have a minimum penalty of. When stocks and bonds are unstable, gold tends to remain stable and even rise in value, especially during times of inflation.

For this reason, you may want to invest in gold in your individual retirement account. Although coins are specifically prohibited as IRA investment, some gold coins are allowed. Investing in gold with an IRA presents some challenges when deciding who will act as the trustee of the account. IRS Publication 590 states that the IRS prohibits investing in collectibles in your IRA account.

This ban includes works of art, metals, carpets, antiques and precious stones. Coins are also included, but only collectible coins, such as antique or rare coins, which are of primary interest to coin collectors, not to people interested in the precious metal content of the coin. The tax law clearly specifies certain currencies that can be held in an IRA. One, half, one quarter and one tenth of an ounce U.

S. Gold Eagles are allowed. You can also invest in certain platinum coins within your IRA, as well as platinum and palladium bars. These metals have more industrial value due to their use in the manufacture of catalytic converters for automobiles, but their value tends to follow the movement of gold.

Gold and silver bars are also allowed. The ingot is molten metal in the form of a bar, rather than in the form of a coin. To invest in gold and silver in your IRA, you need an IRA trustee who is willing to manage these investments. Many trustees are unwilling to invest in gold due to their storage requirements.

In addition, gold must be stored under the control of the trustee to prevent the owner of an IRA from accessing and selling the gold outside the tax-free structure of the IRA. Unlike withdrawing funds from a traditional retirement account, a gold-backed IRA allows you to leave with a powerful physical asset in hand (gold) that you can hold, sell at a later time, use as currency at a time of crisis or pass on to family members. For a gold IRA, you need a broker to buy the gold and a custodian to create and manage the account. Any product that falls outside these ranges except American Gold Eagles is not approved for IRA contributions.

Storing the gold from your IRA in your home can be considered distribution meaning you may lose your tax-deferred benefits and you could be penalized if you are under the age of 59 and a half. If any of the IRA-eligible gold coins listed above have been qualified by a certification organization (such as the Professional Coin Sorting Service), the IRS will normally define them as “collectible” and therefore are not allowed in IRAs. There are currently a variety of precious metals that meet the minimum purity requirements that are acceptable for inclusion in a gold IRA account such as American Gold Eagle coins; Canadian Gold Maple Leaf coins; American Silver Eagle; American Silver Eagle; American Platinum Eagle; and gold, silver, platinum and palladium bars (bullion) that meet applicable purity standards. Once you are 59 and a half years old you can liquidate the precious metals in your self-directed IRA for cash or take physical possession of your gold and silver without penalty.

Gold IRAs are usually defined as “alternative investments” meaning that they are not traded on a public exchange and require special experience to value them. What's more if the IRS determines that the day your IRA gold entered your home was the “distribution” date you could end up paying additional penalties and back taxes owed from the time of distribution.

Rochelle Paker
Rochelle Paker

Personal finance specialist. Areas of expertise Banking, business, real estate, consumer credit, retirement accounts.

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