This means that your IRA gold custodian must store your gold in an IRS-approved depository. You can only store IRA gold yourself at home if you are not a bank trustee or deposit manager. 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.
The IRS requires you to store your gold in an IRS-approved depot, a company that manages and stores precious metals. It shows dozens of gold bars in what appears to be a personal safe for men, and account holders even get their own free safe. You can buy gold coins and gold bars, invest in a gold ETF, or invest in stocks of gold mining companies. To own gold, whether in the form of coins or precious metals, you need a genuine, self-directed IRA in an IRA, which is offered by a few custodian banks.
While you can technically set up an LLC and control your IRA purchases yourself (as long as you meet some strict requirements), you still can’t store the gold in your home. The IRS also allows you to transfer an existing retirement account to a Gold IRA, which gives you the opportunity to save money and avoid tax penalties associated with setting up a new Gold IRA. For example, adding gold that you already own and storing it in an IRS-approved depot are two examples. After you’ve funded your account, you can let your IRA custodian know which gold bars you’d like to buy (and how much).
Gold can also be added to a SEP IRA or Solo 401 (k), accounts created by self-employed individuals or with an employer-sponsored plan. Gold IRAs are known as self-directed IRAs, but you can use them to purchase certain IRS-approved gold bars and precious metals. It may be better to invest your IRA in a precious metals ETF or own precious metals in a taxable account. Typically, the IRS only allows you to buy IRA-approved gold in quantities that are less than the amounts allowed by other retirement accounts, such as traditional IRAs and Roth IRAs.
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. The IRS has issued private letter rules to major gold ETFs, which state that IRAs may own the ETFs. Investing in physical gold through your IRA can be a great way to diversify your investments, particularly if you’re planning to use it as protection against inflation and market volatility. A reliable IRA custodian can give you valuable advice on managing your gold and other precious metals.