IRA Financial Group’s silver IRA has been used by thousands of clients to purchase IRS approved bullion with their self-directed IRA over the last nine years.
What Type of Silver is IRS Approved Investments?
Internal Revenue Code Section 408(m) lists the type of precious metals and coins that are permitted investments using IRA funds:
- (A) any coin which is –
- a gold coin described in paragraph (7), (8), (9), or (10) of section 5112(a) of title 31, United States Code,
- a silver coin described in section 5112(e) of title 31, United States Code,
- a platinum coin described in section 5112(k) of title 31, United States Code, or
- a coin issued under the laws of any State,
- (B) any gold, silver, platinum, or palladium bullion of a fineness equal to or exceeding the minimum fineness that a contract market (as described in section 7 of the Commodity Exchange Act, 7 U.S.C. 7)  requires for metals which may be delivered in satisfaction of a regulated futures contract, if such bullion is in the physical possession of a trustee described under subsection (a) of this section.
In addition, the Technical and Miscellaneous Revenue Act of 1988 allowed IRA owners to invest in state minted coins so long as they are held in the possession of the IRA holder.
How do I hold Silver in an IRA?
Internal Revenue Code Section 408(m) identifies what types of coins and precious metals (bullion) is permitted to be purchased using a Self-Directed IRA. Section 408(m) also states that bullion (IRS approved gold, silver, or palladium) must be held in the physical possession of a trustee described under subsection (a). Bullion is defined as gold bars, silver bars, other precious metals bars or ingots. Bullion is also used to refer to a metal piece shaped in the form of a coin or a bar and plated with a precious metal. The defining attribute of bullion is that it is valued by its mass and purity rather than by a face value as money. Examples are gold-plated bars and coins.
A trustee is defined in Internal Revenue Code Section 408(a) as a bank (as defined in subsection (n)) or such other person who demonstrates to the satisfaction of the Secretary that the manner in which such other person will administer the trust will be consistent with the requirements of this section.
Internal Revenue Code Section 408(n) defines a bank as any bank (as defined in section 581) or an insured credit union (within the meaning of paragraph (6) or (7) of section 101 of the Federal Credit Union Act).
Section 581 defines a bank as a bank or trust company incorporated and doing business under the laws of the United States (including laws relating to the District of Columbia) or of any State, a substantial part of the business of which consists of receiving deposits and making loans and discounts, or of exercising fiduciary powers similar to those permitted to national banks under authority of the Comptroller of the Currency, and which is subject by law to supervision and examination by State, Territorial, or Federal authority having supervision over banking institutions. Such term also means a domestic building and loan association. The Code seems to suggest that metals cannot be held in a foreign bank account since it would not satisfy the definition of a bank. The question then becomes what does “physical possession” mean.
IRC Section 408(m) clearly states that gold, silver, or palladium bullion must be held in the physical possession of a U.S. trustee, otherwise known as a U.S. bank or financial institution.
The safest approaching to holding IRS approved IRA silver is with an approved depository. However, many retirement investors have looked into potentially holding precious metals (gold, silver, palladium bullion) in a safe deposit box at a U.S. bank in the name of the Self-Directed IRA LLC is that in the “physical possession” of a U.S. trustee or bank. Although, there may be sound support for this position there has been no IRS guidance on this issue. As a result, it is advisable to hold IRA owned gold at a depository. However, what is very clear, is that one should not hold Gold in an IRA personally.
In general, the rules surrounding the ownership and possession of silver IRA are complicated. Therefore, it is crucial that one works with a firm, such as IRA Financial Group, that has the expertise and resources to help one navigate the IRS rules without being preoccupied with selling you coins or precious metals.