A Precious Metals IRA is an investment vehicle that allows you to diversify your assets by holding alternative investments like gold. Not all forms of gold are allowed in a Gold IRA, however; the Internal Revenue Service (IRS) has set forth strict requirements and purity standards on which types of gold can be deposited into IRAs as this precious metal. In fact, there are several kinds or coins and bars cannot be used for deposit because they don’t meet those minimum purity requirements mandated by the IRS.
To start, you’ll want to find the right types of gold bullion products for your Gold IRA. You should meet with a reputable financial advisor or tax professional that is familiar with IRS requirements and how they apply to investing in gold through an IRA account before making any decisions about what type of investments are best for your retirement savings – especially since it’s crucial not only understand why these rules exist but also know which metals qualify as legitimate assets inside one:
Gold bars typically come in 1-ounce denominations; however, many people may prefer coins instead because they have higher numismatic value than their intrinsic metal content (i.e., if someone was interested specifically in silver). Popular examples include American Eagles from the US Mint and Canadian Maple Leafs etc.
IRS Requirements for Gold
The IRS allows the holder of a self-directed precious metals IRA to hold eligible silver bullion products within a retirement account that offers numerous tax benefits. The investor is allowed to protect their portfolio from inflation while also generating wealth on a tax-deferred or -free basis using gold as an alternative investment in its IRA. Here are the main requirements set forth by the IRS about storing gold and other forms of metal in your individual retirement account:
The following table has information extracted from Publication 590, Individual Retirement Arrangements (IRAs). This publication contains additional relevant material for determining what constitutes taxable distributions when you take possession of any type of physical currency including coins; money orders; cashier’s checks, etc.
- IRA eligibility requires a 0.995-pure minimum requirement for gold bullion products, which are coins or bars that must be at least 0.995% pure to meet the requirements and deposit into an IRA account.”
- The gold stored in an IRA must be held at a depository. A depository is highly secure and has been approved by the IRS to hold precious metals. Most bullion dealers will have one or more preferred depositories, where you can store your gold for retirement purposes as well as other investment opportunities that may arise from owning physical assets like this.
- A Certified Gold Custodian must be appointed as the trustee of an IRA. In a typical scenario, investors would find bullion dealers from whom they’re going to purchase gold for their IRA and then those companies assist them in setting up accounts with partnered custodians and depository services. As such, many only interact with one company when investing through a Gold Retirement Account (GRA).
IRA-approved Gold Coins
Here is a list of some of the most popular gold coins that are eligible to be deposited into an IRA:
- American Gold Eagles: The American Gold Eagle is 91.67% pure gold, but the coin itself weighs 1.09 troy ounce so it still contains a full troy ounce of gold in its weight alone!
- American Gold Buffaloes: The U.S.’s first 1 oz gold coin was the Gold Buffalo, and it quickly became popular amongst collectors due to its gorgeous design (eagle’s head on one side with buffalo standing in front of mountains) and high quality: weighing exactly an ounce at .9999 purity! The Canadian Maple Leaf is similar but unlike most coins minted by other countries, this one has been produced since 1979 – making them more than 30 years old!
- Australian Gold Kangaroos: These Australian Gold Kangaroo coins were introduced in 1987 and are still popular today as a collectible item. They are considered legal tender for transactions within Australia, even though they have been produced by an entirely state-owned company since their inception.
- Austrian Gold Philharmonic: This coin, known for its iconic Musicverein design, includes a symphony of common instruments like the cello, harp and french horn.
- Canadian Gold Maple Leafs: The Royal Canadian Mint guarantees the purity and weight of Gold Maple Leafs. They come in packs of 10, typically stored in mint tubes.
- Canadian War of 1812 Gold Coins: The Royal Canadian Mint guarantees both the weight and purity of these limited commemorative coins, which have been issued for Canada’s bicentennial War of 1812. They are available in sheets or as singles directly from the mint itself.
Popular IRA-approved Gold Bars
- Credit Suisse Gold Bars: These bars are minted by the prestigious Credit Suisse Mint, headquartered in Zurich, Switzerland. All of these bars meet minimum purity levels of 99.99%.
- Johnson Matthey Gold Bar: Johnson Matthey gold bars are guaranteed to meet a.9999-fine purity level, and they come in many denominations that make them popular among investors.
- Valcambi Gold CombiBar: These “divisible” bars consist of 0.999% pure gold and provide the distinct advantage of being split into 50 easily detachable 1 gram mini bars that can be used for trading or as a convenient, portable way to own some physical gold bullion.
Gold Bullion Coins NOT Allowed in an IRA
The following coins are not eligible for use with a precious metals IRA:
- Chilean 100 Peso Coins
- Chinese Panda Coins
- Dutch 10 Guilder Coins
- French Napoleon Coins
- Israel Tower of David Coins
- Mexican Peso Coins
- U.K. Britannia Coins
- South African Krugerrand coins
- Swiss 20 Franc Coins
- Switzerland Vreneli Coins
- Somalia Elephant Coins
- United Kingdom Sovereign Coins
- United Kingdom Queen’s Beasts Gold Coins
- U.S. Double Eagle Gold Coins
- Soviet and Russian Chervonets Coins
- Italian 20 Lira Gold Coins
- French 20 Franc Gold Coins
- U.S. Liberty coins
- Tristan Da Cunha Gold Double Sovereign
- Sierra Leone Gold Lion Head Coins
- Turkey Gold 100 Kurush
- Saudi Arabia Gold One Guinea Coins
- Bhutan Gold 1 Sertum Jigme Dorji Wangchuck Coins
- Singapore Gold 100 Singold Coins
- Macau Gold Year of the Monkey Coins
- India Gold Sovereign George V Coins
- Uruguay Gold 5 Pesos
- Argentina Gold 5 Pesos
- Denmark Gold 20 Kroner Frederik VIII
- Colombia Gold 5 Pesos
- Brazil Gold 20,000 Reis
- Cayman Islands Gold $25
- Niue Gold Hawksbill Turtle Coins
- New Zealand Gold Kiwis
- Peru Gold 100,000 Soles Miguel Grau (1979) and Peru Gold 1 Libra
- Venezuela Gold 60 Bolivares (1955-1960)
- Dominican Republic Gold 30 Pesos (1955)
- Guatemala 1/2 oz Gold Tecun Uman (1965)
- Austria Gold 100 Coronas
- Germany Gold 20 Marks Prussia (1871-1913), Germany Gold 20 Mark Bavaria Otto (1895-1913)
- Netherlands Gold 10 Guilders
- Belgium Gold 20 Francs Leopold II (1867-1914)
- Denmark Gold 10 Kroner The Nightingale (2007), Denmark Gold 10 Kroner Snow Queen (2006)
- Hungary Gold 100 Korona (1908)
- Cook Islands $100 Gold Armillary Coin Valcambi (2015 1 oz)
- Cook Islands Year of the Monkey $200 Mother of Pearl Series Gold Coins (5 ounces)
- Sweden Gold 20 Kronor (Gustaf V 1920)
- Isle of Man 1 oz Gold Noble (2016)
- 2001 Isle of Man 1/5 oz Gold Somali Kittens, 1994 Isle of Man 1/5 oz Gold Japanese Bobtail Cat, 1991 Isle of Man 1/5 oz Gold Norwegian Cat, 1995 Isle of Man 1/10 oz Gold Turkish Van Cat, 1992 Isle of Man 1/5 oz Gold Siamese Cat, 1994 Isle of Man 1/5 oz Gold Japanese Bobtail Cat, 1990 Isle of Man 1 oz Gold New York Alley Cat, 1993 Isle of Man 1/10 oz Gold Maine Coon Cat, 1989 Isle of Man 1 oz Gold Persian Cat, 2001 Isle of Man 1 oz Gold Somali Kittens
- Greece Gold 20 Drachmai George I (1884-A)
- Germany 1/2 oz Gold 100 Euro Introduction of the Euro (2002) and 2007 Germany 1/2 oz Gold 100 Euro Lübeck, 2005 Germany 1/2 oz Gold 100 Euro Soccer World Cup Germany
- Yugoslavia Gold Dukat Alexander I (1931-1933)
- Serbia Gold 10 Dinara (1882)
- Sardinia Gold 20 Lire Carlo Felice (1821-1831)
- Russia Gold 15 Roubles Nicholas II (189), Russia Gold 10 Roubles Chervonets (1975-1982)
- Italy Gold 20 Lire Vittorio Emanuele II (1861-1878)
- Poland Gold 10 Zlotych Boleslaw (1925)
- Monaco Gold 100 Francs Albert I (1882-1904), Monaco Gold 20 Francs Charles III (1878-1879)
- Gibraltar Gold 1/10 oz Royal Cherubs
- Ukraine 1/4 oz Gold Archangel Michael (2014)
- Venice Gold Zecchino Ducat Pietro Grimani (1741-1752), Venice Gold Zecchino Ducat Ludovico Manin (1789-1797)
- Portugal Gold 10,000 Reis King Luiz I (1878-1889), Portugal Gold 5000 Reis King Luiz I (
- Romania Gold 20 Lei 3 Kings (1944)
- Vatican City Gold 100 Lire Pope Pius XI (1929)
- M PJ Spain Gold Escudo (1781)
- Bermuda 1 oz Proof Gold $60 Triangle (1997)
- Niue 1 oz Gold $200 Hawksbill Turtle (2016)
- Fiji 1 oz Gold $200 Taku (2012)
Coins are a great way to start building an investment portfolio. However, there are certain types of coins that should be avoided since they aren’t necessarily good investments and cost more than their face value. For example, avoid all commemoratives as well as numismatics or collector’s coins because these usually have higher premiums attached to them and will not make much profit over time in terms of the price increase compared with what you initially paid for it (i.e., greater risk).
Benefits of Investing in IRA-approved Gold
With a gold-backed IRA, the ongoing depreciation of your dollars will not cause any loss in value. Rather than seeing their money devalue when inflation rises or purchasing power decreases because it is tied to paper currency with no intrinsic value, investors are turning towards precious metals as an alternative way to store wealth within these types of accounts. When this happens demand for gold increases and so does its price due to increased need for the metal.
Gold IRA investors intrinsically benefits from this clear and consistent correlation – as the value of the dollar decreases, the value of gold increases.
Although some analysts speculate that gold could reach $5000 per ounce within the next decade, and mining companies estimate all of Earth’s discovered gold deposits will be mined in 20 years, now is one of the best times to hold onto an asset.