IRA-Eligible Gold and Silver: What the Tax Code Actually Allows

You'll see "IRS-approved gold" in a lot of gold IRA marketing. The IRS doesn't approve coins or bars, and it publishes no list of eligible products. What decides whether a metal can go in an IRA is a short section of the tax code, section 408(m), and the exchange purity standards it refers to. This page explains what that section says, how common coins measure up against it, and where the official sources run out.

The Rule: Metals Are Collectibles, With Two Exceptions

The tax code treats "any metal" and "any stamp or coin" as a collectible. If an IRA buys a collectible, section 408(m)(1) says the purchase "shall be treated… as a distribution from such account in an amount equal to the cost to such account of such collectible." In plain terms, the IRA is treated as if it paid that money out to you.

Section 408(m)(3) then carves out two exceptions:

1. Certain U.S. coins, named in the law. The gold coins described in 31 U.S.C. § 5112(a)(7)–(10), which are the American Gold Eagles; the silver coin in § 5112(e), the American Silver Eagle; the platinum coins in § 5112(k), American Platinum Eagles; and "a coin issued under the laws of any State."
2. Bullion of a minimum purity. "Any gold, silver, platinum, or palladium bullion of a fineness equal to or exceeding the minimum fineness that a contract market… requires for metals which may be delivered in satisfaction of a regulated futures contract."

The statute adds a condition that the bullion be "in the physical possession of a trustee." The IRS's own summary in Publication 590-A: "Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department. It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion."

The Purity Standards the Law Points To

The tax code doesn't state a purity number. It borrows one from the futures exchanges. These are the delivery standards in the exchanges' own rulebooks:

Two caveats. First, these are exchange rules the statute refers to, not IRS figures; no IRS publication we found states them. Second, COMEX also lists a gold kilo contract that requires .9999, and the statute doesn't say which gold contract applies. The .995 standard of the main gold contract is the figure most commonly cited.

How Common Coins Measure Up

This table applies the statute to widely sold coins, using each issuer's official purity. "Named in the law" means the coin qualifies under the first exception regardless of purity. "Purity route" means any eligibility depends on meeting the exchange standard, plus trustee possession.

A point that surprises people: no IRS publication, ruling, or court decision we found names the Maple Leaf, Philharmonic, Britannia, or Krugerrand at all. The coin-by-coin eligibility lists you see online are inferences from purity, the same inference this table makes. It's a reasonable reading of the statute, not an IRS determination.

Krugerrands

The Krugerrand isn't one of the named U.S. coins, and at 22-karat it falls below the .995 gold standard, so on its face it doesn't meet either route. You may also read that Krugerrands are "banned." The only U.S. ban was a 1986 law prohibiting their import, which Congress repealed in 1993. It had nothing to do with IRAs.

Proof coins

The same law that authorizes American Eagles also authorizes proof versions, and dealers point to that as the basis for putting proof Eagles in IRAs. We found no IRS ruling or publication that addresses proof Eagles specifically. If you're considering one, ask the IRA custodian in writing whether it will hold the coin and on what basis.

Possession Matters as Much as Purity

Meeting the purity standard isn't enough on its own. The bullion must be in the physical possession of the IRA's trustee. The IRS says the exception covers bullion "if a bank or approved non-bank trustee keeps physical possession of it."

The IRS has applied this strictly. In a 2002 private letter ruling, which can't be cited as precedent, it treated IRA metals held by non-bank safekeeping firms, rather than by the IRA trustee, as collectibles, because "this limited exception applies only if a certain type of bullion is in the physical possession of the IRA trustee." And the U.S. Tax Court has held that metals an IRA owner keeps at home are a taxable distribution. Our guide to home storage gold IRAs covers that case in detail.

Bars as Well as Coins

The bullion exception isn't limited to coins. It covers "gold, silver, platinum, or palladium bullion" of the required purity, which is why IRAs can also hold bars. The same possession requirement applies.

Questions to Ask Before You Buy

Because there's no official product list, the practical check is to ask, in writing, before any purchase:

• Under which part of § 408(m)(3) does this product qualify: a named U.S. coin, or bullion meeting the exchange purity standard?
• What is its official purity, according to the mint or refiner?
• Will my IRA custodian accept and hold it, and who will have physical possession?
• What is the price over melt value, and what would the dealer pay to buy it back today?

Our guide to gold IRA custodians explains what custodians do and don't check, and our 401(k) to gold IRA rollover guide covers how money gets into the account in the first place.

The Bottom Line

There's no such thing as an IRS-approved coin. The tax code allows certain named U.S. coins, such as American Gold and Silver Eagles, and bullion that meets exchange purity standards: .995 for gold, .999 for silver, and 99.95% for platinum and palladium. Everything else about eligibility is inference from those rules, and in every case a bank or approved trustee must hold the metals. Get the product's basis for eligibility in writing before you buy.