RMD for gold and silver bullion and coins in IRA
My depository has provided the amount of my first RMD since turning turning 70 !/2. My financial adviser suggested converting the silver to gold and sending it all to me to keep in safety deposit box. I had thought that the gold in IRA up to the gold RMD amount had to be sold and cash proceeds deposited to my checking account??? Instead, can gold in amount of RMD be just taken out of IRA depository and sent to me?? Does this meet the IRS requirements?? Does it make sense to close out the entire gold IRA (and avoid $200/year storage charge)?? The taxes on the gold if IRA closed out would far exceed the RMD total tax for all my other IRAs in six annuities and one IRA REIT. But is it permissible to do this?? Can some of the tax be allocated to 2011 RMDs??
Permalink Submitted by Alan Spross on Tue, 2010-09-21 20:54
Your IRA RMD can be taken in cash or in kind by the transfer of IRA assets into a taxable account. This would include stocks, mutual fund shares, and your coins or bullion. You would get a 1099R showing the value of the bullion or coins distributed. Whatever value that is distributed is taxable income except for amounts allocated to your basis in the IRA per Form 8606.
But the bullion left behind must stay in your IRA under the custodial requirements of the IRA custodian. Otherwise you have distributed far more than your RMD and created a huge tax bill as well as forfeited future tax deferral for the distribution. If you no longer want to hold the gold, you can sell it in the IRA and then transfer the proceeds from the current custodian to a new IRA custodian. This would not be a taxable event and you would no longer have the metal or the storage charges.
Another option if you want to hold gold in your IRA and avoid the storage charges is to buy the gold ETF (eg symbol GLD) that represents amounts of bullion in storage, but for your purposes is treated like a stock. You can sell it instantly through your IRA custodian like a stock.