5 Most Common Questions About Owning Gold Within an IRA

Wednesday, September 02, 2015

By Jeffrey Levine, IRA Technical Expert
Follow Me on Twitter: @IRAGuru4EdSlott

It’s been a roller coaster of a few weeks for many investors, and anytime that’s the case, the subject of owning gold always seems to come up. With that in mind, today we share answers to five of the most common questions asked regarding to owning gold within an IRA.

Question: Can I own gold in my IRA?

Answer: Yes, within certain limitations.
 

Question: Can I keep the gold in a safe in my house or a bank safety deposit box?

Answer: No. Gold owned by an IRA must be held with a qualified custodian or trustee. Many major custodians will not hold physical gold, so if that’s something that you want to do, you may either need to find an alternative way of owning gold or find a different custodian.

Question: What type of gold can I own in my IRA?

Answer: In general, your IRA cannot invest in collectibles, including precious metals. There are, however, some exceptions to this rule. For instance, your IRA can invest in certain US-minted coins as well as gold bullion suitable for regulated futures contracts. You can also use your IRA to indirectly invest in gold via investments that track the price of gold, like a gold-focused exchanged traded fund (ETF).

Question: Are there any tax advantages to owning gold in my IRA?

Answer: Potentially. If you are going to own gold somewhere, it could pay to own it, either directly or indirectly, within your IRA. Gold and gold ETFs are taxed as collectibles when owned with non-retirement account money. Instead of the 15% long-term capital gains rate most people are familiar with, a special 28% rate on gains is imposed.

Question: Are there any complications to owning gold in an IRA if I am subject to required minimum distributions (RMD)?

Answer: Generally, no. Gold coins and bars often come in standard sizes and weights, so the fair market value of such gold would generally be easy to calculate.  Gold could be sold in an IRA in order to distribute cash to satisfy an RMD, but alternatively,  an in-kind distribution of gold with a value equal to or greater than your RMD can satisfy that requirement.

For more information on how to invest gold in an IRA, read Beverly DeVeny’s article from last week.
 

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