Investing in Coins Inside Your IRA

Tuesday, August 05, 2014

Joe Cicchinelli, IRA Technical Expert

Follow Me on Twitter: @JoeCiccEdSlott

You are not allowed to invest your IRA money in collectibles such as artwork, rugs, stamps, gems, alcoholic beverages such as fine wine, and antiques. If you invest any part of your IRA in a collectible, you will get a tax bill for it. The Tax Code treats your investment in a collectible as a distribution, which means it’s taxable to you. Also, if you’re under age 59 ½ at the time of the investment, the deemed distribution will be subject to the 10% early distribution penalty tax too. The entire value of your IRA is not deemed distributed to you, only the amount invested in the collectible is taxable.

Coins are also generally considered a collectible and thus are prohibited as an investment inside your IRA. However, there are some exceptions that will allow you to buy certain coins inside your IRA such as certain gold and silver coins minted by the U.S. Treasury after 1985 (American Gold Eagle coins and Silver Eagle coins). According to IRS Publication 590, your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department. There is also an exception for coins issued by any state. Your IRA can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion.

All of your IRAs are allowed to invest in coins such as your traditional, SEP, SIMPLE and Roth IRAs. If you invest your IRA money in coins or bullion, note that it must be held by your IRA custodian rather than you personally. In other words, you can’t have your IRA buy coins or bullion and then put them in your safe deposit box or hide them under your mattress.
 

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