IRA approved gold is the only gold that you can use in an IRA. We want gold IRAs to protect against inflation, accrue in value, and help secure our retirement, but there are a few hoops to jump through first.
It’s important to know every step of the gold-buying process right now so that you can purchase with confidence and integrity.
We’ll be discussing gold bars, why you should avoid gold coins, and how you can sleep easy at night knowing that your gold is insured for tens or hundreds of millions of dollars.
What is IRA Eligible Gold?
Gold is a valuable precious metal, but not all gold is equal. When you smelt gold, there has to be a certain percentage of alloy that helps the gold melt without burning and being destroyed.
On average, that alloy percentage is 0.05%, meaning pure gold bullion is 99.95% finesse, or pure gold.
To be eligible for the IRS, bullion has to meet this finesse rating. IRS eligible gold also must meet some other criteria before it can be seen as an investment in an IRA:
- Produced by a Certified Mint: They don’t just let anyone send in gold and say “That’s good enough”, then count it as an investment. Certified mints must produce the gold that goes into an IRA, whether that’s bullion or coins.
- Safe Transportation: The gold must be transported by certified services like Brinks, or other gold shipping services that take the gold directly from the mint to the depository. If gold isn’t produced in a mint and routed through a certified transportation service, it doesn’t count in your IRA.
- Kept in Safe Custodian Care: Even if you start out with 99.95% finesse gold bullion, it’s only going to be eligible if it’s stored by IRS-approved custodian services in a depository. If it’s not in custodial care, it can’t be verified.
Allowable Gold Coins
- 1 oz American Gold Eagle Coins
- ½ oz American Gold Eagle Coins
- ¼ oz American Gold Eagle Coins
- 1/10 oz American Gold Eagle Coins
- 1 oz American Gold Buffalo Coins
- 1 oz Australian Gold Kangaroo Coins
- 1 oz Austrian Gold Philharmonic Coins
- 1 oz Canadian Gold Maple Leaf Coins
Allowable Gold Bars
- 1 oz Royal Canadian Mint Gold Bars
- 1 oz UBS Gold Bars
- 50 gram Valcambi Gold CombiBars
- 1 oz Valcambi Gold Bars
- 1 oz Sunshine Mint Gold Bars
- 1 oz Credit Suisse Gold Bars
- 10 oz Credit Suisse Gold Bars
- 1 oz Johnson Matthey Gold Bars
Are Gold Coins IRA Eligible?
At one point in time, gold IRAs were exclusively gold coins. In 1974 the law was passed to allow the private ownership of gold, which sent millions of coins flooding back to the US, and since then we’ve seen a huge interest spike in gold ownership.
However, just because you can have gold coins in an IRA doesn’t mean that it’s a good idea. Most gold coins only have a finesse of 91%, and IRA eligible gold has to have a 99.9% finesse rating.
The gold coin program offered by the IRS means that there are IRS-eligible gold coins available, but if you look any of these up, you’ll see something along the lines of “Contains 1oz pure gold” in the total weight, but if you weigh them, you’ll find that there’s usually a 9% weight in alloy.
They’re valuable to the IRS, but not on their own. You also have to pay to ship alloy to and from custodian depositories, and I don’t know about you, but if I’m paying for shipping I’m not doing it for anything less than pure gold.
Gold bullion is the best way to invest in gold IRAs.
Storing Your Gold in an IRA
Gold must be stored with a custodian in an IRA. The IRS has a list of approved depositories that are run by custodians, and those are the only places that you can store your gold (more on this in our FAQ section).
Do not buy gold for your IRA if it ships directly to your home. At that point, it can never be used in an IRA, and you would be forced to privately sell it, pay the capital gains tax on that sale, and then invest that money into IRA eligible gold through a firm at a later date.
It’s never worth having the gold shipped to your home.
Your IRS eligible gold is sold through a mint, can be purchased through an IRA firm, and can be sold through a buyback program of your choosing when you sign up for the IRA.
You can also buy gold ETFs if you do not want to physically own the gold or pay the tax on it when you sell, and those can be stored in an IRA.
Avoid coins, focus on bullion if you want the physical gold, and understand that custodian fees are part of the process (even though none of us like paying them).
We have a guide on gold IRA companies that you can utilize to find the best IRA firm for you that will help handle the sale and transfer of gold, and make everything as hands-free as possible.
Eligible IRA Gold FAQ's
Because an IRA can’t just take your word on the amount of gold you have, its finesse, or even how it’s being stored. If the IRS let you keep ten gold bars at home, and at the time of them allowing you to do this the gold was in mint condition, you could do anything you want with it from that point to the point of sale.
It would lower the cost of your gold (because it would likely be damaged due to improper storage), and the price of that gold would drop, forcing you to sell at a loss or at least a lower price. That would completely pull all faith in the value of gold.
The IRS needs to be able to verify the gold, which is why custodian services are used.
No, it is not. You have to pay capital gains tax on gold, silver, platinum, and palladium. This rate increases after holding the gold for one year, at which point it sits at its highest capital gains tax.
The only way that you can own gold tax free is through ETFs since you do not physically own the gold. The IRS considers these four precious metals to be assets, which are classified as collectibles.
You cannot get away with avoiding tax on selling physical gold bullion. However, the point is to hold and watch the value soar, which would put you at a large gain regardless of capital gains tax (if you invest properly and don’t panic sell when the price dips from time to time).
Your IRA eligible gold has to be stored with a custodian service. In short, custodians are companies that run and support facilities for gold deposits, called depositories.
The custodians run the depositories, which are verified by the IRS to hold gold, and report the finesse, weight, and price of that gold to your IRA account.
Your IRA gold has to be stored here to be eligible under the IRS ruling. You can’t just put gold here, either; it has to be done through a buy order and shipped to the custodian service via verified transport, like a Brinks truck.
The one good thing about custodian services is that they have to carry intense levels of insurance. Most custodians will have insurance in excess of $50 million to $100 million (or more) to insure your gold while it’s in their care.
This is the promise that depositories extend to you as a token of good faith in their services, because if I’m storing my gold with anyone, it’s the service that puts all fault on themselves if something happens to my valuable assets.
Goldco Precious Metals
Goldco is a leader in the precious metals industry, with over a decade of experience helping customers protect their retirement savings.