In general, the IRS does not tell you what type of investment you can make using retirement funds, only the type of investments that are prohibited. These types of transactions are referred to as the “Prohibited Transaction” rules.
Internal Revenue Code Section 408(m) lists the type of precious metals and coins that are permitted investments using IRA funds. The following are the type of precious metals and coins that may be purchased using a self directed IRA:
- One, one-half, one-quarter or one-tenth ounce U.S. gold coins (American Gold Eagle coins are the only gold coins specifically approved for IRAs. Other gold coins, to be eligible as IRA investments, must be at least .995 fine (99.5% pure) and be legal tender coins.
- one ounce silver coins minted by the Treasury Department;
- any coin issued under the laws of any state;
- a platinum coin described in 31 USCS 5112(k) ; and
- gold, silver, platinum or palladium bullion (other than bullion that is made into a coin) of a certain fineness that is in the physical possession of a trustee that meets the requirements for IRA trustees under Code Sec. 408(a).
Before the Technical and Miscellaneous Revenue Act of 1988 (TAMRA), the only coins in which IRA funds could be invested were gold and silver American Eagle coins issued by the Federal Government. TAMRA allows IRA holders to invest in coins issued under the laws of any state.
Effective January 1, 1988, IRA holders are permitted to also invest IRA funds in certain platinum coins as well as certain gold, silver, platinum, or palladium bullion provided the financial institution has physical possession of the coins or bullion.
To learn more about the type of coins that can be purchased with a self-directed IRA LLC, please contact a tax expert at 800-472-0646