SDIRA, QRP, Solo 401k: Precious Metals, Gold, Silver & Coins
Your self-directed retirement account – Checkbook IRA, Checkbook QRP, Checkbook 401k, Checkbook HSA, or Checkbook DB Plan -can invest in precious metals and coins. If you’d like to set-up a Precious Metals IRA, Precious Metals Solo 401k, Precious Metals Defined Benefit Plan, Precious Metals QRP, or Precious Metals HSA – this page provides the compliance information you need to do so.
What Is Precious Metals & Coins Investing?
- Precious metals have a history of maintaining their value over time and during times of financial uncertainty.
- Precious metals, gold in particular, have proven to be an excellent investment in the face of inflation, deflation, and geopolitical crises.
- Investing in precious metals provides diversification to your portfolio as they have done well when stocks under-performed. Direct control of valuable assets that have universal value can provide assurance during turmoil.
- Use your Self-Directed Retirement Account to diversify your portfolio and protect yourself from inflation by investing in gold and silver bullion and coins.
- Use your self-directed retirement account to purchase tangible assets that have universal and intrinsic value.
Although investment in “collectibles” by IRAs and QRPs is generally precluded under Section 408(m) of the Tax Code, Section 408(m)(3) contains carve-outs allowing investment in coins and bullion that meet specific requirements. These exceptions to rules enable you to create a Gold & Silver IRA, Gold & Silver 401k, or Gold & Silver QRP.
Permitted coins include:
- Gold Coins: Gold American Eagles, U.S. Buffalo bullion coins, Gold Canadian Maples, Austrian Philharmonic bullion coins, Australian Kangaroo/Nugget bullion coins.
- Silver Coins: Silver American Eagles, Silver Canadian Maples, Austrian Vienna Philharmonic bullion coins, Australian Kookaburra bullion coins, Mexican Libertad bullion coins.
- Platinum Coins: Platinum American Eagles, Platinum Canadian Maple Leaf bullion coins, Australian Koala bullion coins.
- Palladium: Palladium Canadian Maple Leaf bullion coins.
Permitted bullion must meet certain fineness standards:
- Gold: .9950
- Silver: .9990
- Platinum: .9995
- Palladium: .9995
SDIRA & QRP Precious Metals Compliance
Custody of coins and precious metals: Permitted bullion must be held by a regulated financial institution. Some assert that a close reading of the tax law indicates that this requirement does not apply to American Eagles that are permitted coins. In addition, some self-directed investors take the position that holding allowed metals & coins in a properly titled bank safe deposit box meets the compliance requirements of the Tax Code. ReSure, however, has always recommended that your SDIRA, Solo 401(k), QRP, or Defined Benefit Plan hold allowed coins and precious metals at an approved depository institution and never have the bullion or coins in your physical possession. The Tax Court, in ANDREW MCNULTY AND DONNA MCNULTY v. COMMISSIONER OF INTERNAL REVENUE, ruled against the taxpayer that took physical possession of their IRA/LLC-owned American Eagle coins, siding with the IRS in assessing tax deficiencies and penalties.
Tax Code for SDIRA and Qualified Retirement Plan (“QRP”) Investment in Coins & Bullion
Carve-outs permitting retirement account investment in certain coins is provided in Section 408(m)(3)(A) and for investment in certain precious metals in Section 408(m)(3)(B).
Following are the definition of permitted coins and bullion according to the Tax Code.
Allowable Coins: Section (408)(m)(3)(A)
(i) a gold coin described in paragraph (7), (8), (9), or (10) of section 5112(a) of title 31, United States Code,
(ii) a silver coin described in section 5112(e) of title 31, United States Code,
(iii) a platinum coin described in section 5112(k) of title 31, United States Code, or
(iv) a coin issued under the laws of any State
Allowable Metals: Section 408(m)(3)(B)
“any gold, silver, platinum, or palladium bullion of a fineness equal to or exceeding the minimum fineness that a contract market (as described in section 7 of the Commodity Exchange Act, 7 U.S.C. 7) requires for metals which may be delivered in satisfaction of a regulated futures contract, if such bullion is in the physical possession of a trustee described under subsection (a) of this section.”
IRS Guidance: IRA & QRP Precious Metals, Gold & Silver Investment & Physical Possession
Issue Snapshot – Investments in Collectibles in Individually-Directed Qualified Plan Accounts
Tax Court Ruling(s) Regarding Physical Custody of SDIRA Assets. The Court ruled against the taxpayer, who took physical possession of IRA-LLC gold American Eagle coins.