Are Collectibles and Life Insurance Allowed in an IRA?

Are collectibles allowed in an IRA

Due to IRS restrictions, IRAs cannot invest in collectibles and life insurance due to concerns that holding it could protect stolen art from being recovered.

The IRS classifies collectibles as artworks, rugs and antiques; metals and gems; stamps, coins and alcoholic beverages as collectibles. Some self-directed IRA custodians allow investors to invest in other alternative assets, including cryptocurrency and non-fungible tokens (NFTs); it is being studied whether these should also be classified as collectibles by the IRS.


Artwork and tangible personal property are not allowed in IRAs under IRS rules, including artwork, rugs, antique coins (excluding certain precious metals which are popular investments within self-directed IRAs ), gems stamps and alcoholic beverages which fall into this category as collectible items and cannot be purchased with retirement funds.

This rule was implemented as a response to stolen artwork from Nazi era being discovered during the 1970s, and government not wanting to provide people with a vehicle for hiding them as investments. Furthermore, many banks, brokerage houses and mutual fund companies do not serve as trustees for non-traditional IRA investments and thus also do not permit certain types of collectibles to be added into accounts.

Collectibles in an IRA have less clear regulations than stocks and securities, which are subject to tight oversight by regulatory bodies. If an IRA owner or disqualified person engages in prohibited transactions like purchasing life insurance policies with funds from his IRA account or collecting collectibles that could potentially have come from within an IRA, such activities would violate tax law and incur penalties as they violate federal tax regulations and could lead to tax penalties from federal tax authorities.


Collector items span from art, coins, stamps, rugs and gemstones – to antique toys like dinosaurs! However, due to how they’re valued by their respective markets – collectibles cannot be included in self-directed IRAs due to this unfair appraisal system which depends on what someone will pay.

There are certain prohibited transactions IRA owners and beneficiaries should avoid when it comes to collecting. These include purchasing primary homes (or vacation properties), making loans to disqualified people or purchasing real estate held by family members of the plan.

However, this rule allows some flexibility for those investing in alternative assets. For instance, an IRA that invests in a pass-through investment fund that owns antiques or tangible personal property such as coins that meet IRS purity standards would likely not violate 408(m).

Gold and Silver Coins

Precious metals such as gold and silver may qualify for inclusion in an Individual Retirement Account, however there are specific guidelines and restrictions that must be observed in doing so. An IRA can only invest in coins and bullion that comply with purity standards set by the IRS.

When an IRA invests in collectibles owned by disqualified individuals, or invests in equity interests of pass-through entities that own these collectibles, it’s considered a prohibited transaction and will result in penalties.

American Eagle gold and silver coins issued after 1985 from the U.S. Treasury are eligible investments within an IRA; platinum, gold, silver and palladium bullion coins or bars approved by your custodian must also be accepted; these investments must be made through an approved dealer – trade associations like the American Numismatic Association or Industry Council for Tangible Assets can help locate trustworthy dealers near you, but you should also ask your IRA custodian whether they have relationships with any dealers nearby.


The IRS is very specific when it comes to what can’t be invested in an IRA, including art works, antiques, rugs or other decorative personal property, metals and gems, stamps coins and alcoholic beverages. However, the definition of collectibles remains vague enough that Self-Directed IRAs could invest in pass-through investment funds that hold collectibles (such as gold mining companies) if their equity stake in these entities does not exceed 25%.

An IRA cannot be used to engage in investments prohibited under the Internal Revenue Code, such as life insurance contracts (term, whole and universal), lending money directly or indirectly to disqualified people and certain limited partnerships or LLCs, holding any real estate that benefits its owner directly like renting it out or living there; lending money directly or indirectly to disqualified people like family members as well as employees of your business or those you control would also violate these restrictions.

Raymond Banks Administrator
Raymond Banks is a published author in the commodity world. He has written extensively about gold and silver investments, and his work has been featured in some of the most respected financial journals in the industry. Raymond\\\'s expertise in the commodities market is highly sought-after, and he regularly delivers presentations on behalf of various investment firms. He is also a regular guest on financial news programmes, where he offers his expert insights into the latest commodity trends.

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