Is Buying Coins and Bullion With Retirement Funds Legal?

Due to extensive advertising by precious metals dealers, many people are aware that they can buy IRS approved coins and bullion/precious metals using retirement funds – but some remain confused as to whether this practice is legal.

As per IRC Section 408(m), coins and bullion/precious metals must be held by a trustee such as a depository for safekeeping.


Coins are made of metal or other material which has been stamped to distinguish it and has an intrinsic value, certified by special marks on it. Coins are classified as precious metals or bullion in an Individual Retirement Account (IRA) but the IRS only allows American Eagle and US State minted coins of certain finesse to be purchased with retirement funds; The Technical and Miscellaneous Revenue Act of 1988 (TAMRA) specifically allows state minted coins to be held within an IRA; for safety, you should store this asset with a trustee such as an approved depository.

Non-Fungible Tokens (NFTs) are digital identities used to certify ownership of rights or assets using distributed ledger technology like blockchain. The IRS intends to issue guidance regarding NFTs as section 408(m) collectibles; until such time, trustees or depository services should store NFTs until further guidance becomes available.

Bullion/Precious Metals

Due to advertising by precious metals dealers, more people are becoming aware that investing in gold, silver, platinum and palladium bullion with retirement funds is possible. This can be especially advantageous for individuals who own self-directed individual retirement accounts (IRA) or 401(k). The Internal Revenue Code (IRC) sets forth a list of coins and bullion that do not fall into the “collectibles” category and thus can be purchased with an IRA account.

These coins and bullion come in all sorts of shapes, sizes, and weights to offer investors plenty of choices when investing their retirement funds in Precious Metals. Smaller sizes such as 1 oz gold bars or rounds require less of an upfront financial commitment yet still provide for diversification in an investment portfolio.

Bullion, as an investment product valued based solely on weight rather than form, typically comes in the form of delivery bars or ingots; it may also take the shape of coins or rings.

Safe Deposit Boxes

Safe deposit boxes are secure containers in the vault of a financial institution that customers can rent for a monthly fee, offering them as an ideal place to store valuables, antiques, documents and items of sentimental value such as original birth certificates, property deeds and car titles that have yet to be converted to electronic securities.

However, safe deposit boxes aren’t the ideal place for keeping money safe. Placing large sums of money in one can create the impression that you’re trying to launder money or hide assets from the IRS, plus its contents won’t be covered under insurance like bank deposit accounts are.

If you store valuables in a bank safe deposit box, be sure to periodically inspect it and update a list of what’s inside. Furthermore, carefully read your box rental agreement so that you’re fully informed of all its rules and restrictions.

Self-Directed IRA LLC

Self-Directed IRA LLC accounts provide account holders with access to alternative assets like real estate, private company stock and tax liens for retirement investing purposes. IRA Financial offers annual compliance services that ensure this type of retirement investment structure remains compliant with IRS rules at all times – our annual compliance services ensure this.

One popular strategy for investing precious metals and coins with a Self-Directed IRA LLC is holding coins/bullion in a bank safe deposit box, according to many tax practitioners. Many believe this fulfills the physical possession requirement outlined by Section 408(m). IRA Financial does not advise using this approach and instead suggests switching your investment vehicle entirely – we suggest the Checkbook IRA, which offers easy and direct investments such as real estate, tax liens, etc without waiting on custodians to disburse funds.

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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