Although IRAs used to be limited to holding American Eagle gold and silver coins, IRAs can now invest in IRS-approved gold, silver, palladium, and platinum. Not all gold investments can belong to an IRA. The basic rule is that an IRA cannot own a collectible, and precious metals are defined as collectibles, regardless of whether the investment is in gold bars or coins. Luckily, there are exceptions to the general rule for gold, silver, platinum, and palladium, which are held in specific forms. A gold certificate is simply a piece of paper that can be redeemed for physical gold.
If you have a precious metal IRA, your IRA directly owns physical bullion bars or coins, which you select and order directly. To avoid running afoul of tax rules for proprietary transactions, self-governing IRAs, including gold IRAs, must have an IRS-approved custodian bank. Unfortunately, most Gold IRA companies don’t have a good record of fee transparency on their websites, so finding out the details may require a phone call or two. Unlike gold ETFs or gold company stocks, a precious metal IRA allows you to hold the physical precious metals in accordance with IRS regulations.
The IRS has issued private letter rules to major gold ETFs, which state that IRAs may own the ETFs. People who believe that physically owning gold or other precious metals is safer can achieve that peace of mind with a gold or silver IRA. A platinum IRA is an IRA in which a portion of its total assets is invested in IRA-approved forms of platinum bars. The ETF is also able to buy, store, and insure gold at a much lower price than you or an IRA custodian bank.
If you properly transfer your money from an IRA or retirement account to a gold IRA, there is no tax impact. If you just want to buy gold or silver, here’s what you need to know about buying gold outside of an IRA. One important rule to know about storing physical gold in an IRA is that your precious metals MUST be stored at an approved depository institution such as the Delaware Depository Service Company or Brink’s Global Services, not in your home or in a safe. Two of the most commonly used types of IRA-approved gold include American Eagle coins and precious metals and Canadian Maple Leaf coins.
Gold IRA companies can help you with this process, from choosing a custodian bank to arranging the storage of your precious metals. Custodian banks that offer a checkbook IRA structure generally recommend that their customers store IRA metals in a safe deposit box. You can also make annual contributions to your IRA based on limits based on your IRA category and age. According to the Retirement Industry Trust Association, the custodian is a financial firm that is tasked with carrying out investment activities and administrative tasks required to maintain your IRA’s status with the IRS. This is critical to maintaining their tax status.
It’s important to be aware of all costs and expenses before you buy physical gold to keep in an IRA.
