In a regular IRA, you can’t own physical gold, although you can invest in a wide variety of assets that are invested in gold, such as stocks of gold mining companies or exchange-traded gold funds (ETFs). Not all gold investments can belong to an IRA. The basic rule is that an IRA cannot own a collectible, and precious metals are defined as collectibles, regardless of whether the investment is in gold bars or coins. Luckily, there are exceptions to the general rule for gold, silver, platinum, and palladium, which are held in specific forms. Specialized custodian banks such as Fidelity, Schwab or TD Ameritrade do not manage physical gold in an IRA.
So if you want to hold gold in your IRA, you’ll need to set up a self-directed IRA first and then you’ll need to find a custodian that specializes in self-directed gold IRAs. A quick search on Google for “self-directed Gold IRA” yields numerous results. I know that American Bullion has been around for years, and so has APMEX. If you already have an IRA or 401 (k), either Regular or Roth, you have the option to convert some or all of your balance to a Gold IRA.
These IRAs are generally not offered by the big brokerage firms or banks, as they enable investments that these companies cannot benefit from. The same goes for those who have physically taken possession of gold, silver, or other precious metals that belong to their IRAs. Neither the IRS nor the federal courts have commented on the legality of these agreements, and the IRS has warned that they carry the risk of disqualifying the IRA. However, these rules do not say that the self-governing IRA account holder can physically take possession of the coins or metal.
Setting up a checkbook IRA is complicated because you must be a limited liability company (LLC) and have a business current account, to name just two of the requirements. My precious metal IRA costs 45 basis points per year (0.4, including fees, storage) AND ONE million dollar insurance for one million dollar gold bars. Rules against holding collectibles Tax legislation prohibits IRA holders from investing in life insurance, stock in an S corporation, or collectibles. This leads to the conclusion that only gold bars — and not gold coins — must remain in the possession of the trustee.
During his tenure as Director of the Mint, there was little demand for gold IRAs, according to Moy, as it is a very complicated transaction that only the most stubborn investor was willing to make. Moy, chief strategist at Fortress Gold, who, as former director of the United States Mint, oversaw the world’s largest production of gold and silver coins. Therefore, a qualified custodian or trustee must be responsible for managing and disposing of property in a self-managed IRA. This business model is not designed to work with alternative assets such as real estate, gold coins, etc.
If that’s your goal, you don’t want to own gold through an IRA, but rather have it in your possession or close by. However, to qualify for gold IRAs, custodians must be insured, which protects your investment as long as your account does not exceed the account value specified by the custodian bank. She hired an outside custodian bank, the custodian prompted the IRA to set up an LLC, the LLC set up a bank account, and the bank account was used by the account holder for investments.