Precious metals

What it is

A self-directed IRA can hold specific bullion and coins in gold, silver, platinum, and palladium. Metals are a tangible, inflation-sensitive holding, but the tax code is strict about which metals qualify and where they are kept.

Holding it in a self-directed IRA

Eligible metals are purchased for the IRA and held by the custodian at an approved depository in the IRA’s name. You never take personal possession — doing so is treated as a distribution.

Requirements

Only metals meeting IRC § 408(m) fineness standards qualify — gold ≥ .995, silver ≥ .999, platinum and palladium ≥ .9995 — plus specific coins the Code permits, such as American Eagles.
Metals are held by the trustee or custodian at an approved depository.
Purchases are funded from IRA cash and the metals are titled to the IRA.

Limitations and prohibitions

Collectibles are generally prohibited in an IRA under IRC § 408(m); most numismatic or “rare” coins do not qualify.
Taking personal possession of IRA metals is a distribution — home storage has been rejected by the U.S. Tax Court (McNulty v. Commissioner, 2021).
Metals outside the permitted fineness and coin lists cannot be held.
Storage and insurance fees apply and reduce net return.

Valuation and liquidity

Bullion is priced from the spot market and is reasonably liquid through dealers, though buy/sell spreads and depository fees apply; valuation for the account uses market pricing.

Tax considerations

The permitted-metal and approved-depository rules are unforgiving — confirm eligibility before any purchase, and never plan to store IRA metals personally.

A worked example

Your IRA buys American Gold Eagles and one-ounce .9999 gold bars. They ship to an approved depository and are held in the IRA’s name. If you took them home “for safekeeping,” the IRS would treat it as a taxable distribution of their full value — exactly the result in the McNulty case.

IRS forms & records

Form 5498 — fair-market value of the metals.
Form 1099-R — distributions, including a deemed distribution if you take possession.

Common mistakes that can cost you

Home storage of IRA metals — taking possession is a deemed distribution (McNulty).
Buying non-qualifying numismatic or “rare” coins, or bullion below the required fineness.
Ignoring depository storage and insurance fees that reduce net return.

Before you invest

The metal meets IRC § 408(m) fineness (gold .995, silver .999, platinum/palladium .9995) or is a permitted coin.
It’s stored at an approved depository, not at home.
It’s titled to the IRA.
Storage and insurance fees are understood.

Authorities

IRC § 408(m) — collectibles rule and the bullion/coin exception, including fineness standards.
McNulty v. Commissioner, 157 T.C. No. 10 (2021) — home storage of IRA metals is a distribution.

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