Tax Payer Relief Act (1997) made it possible to include precious metals in Individual Retirement Accounts. This now includes platinum, silver, and gold. Some account holding gold in an IRA to diversify their investment funds. As a rule, the value of gold will rise if stock prices fall. This can boost the value your portfolio during weak periods in the stock markets.
What are the Steps?
1. Talk to your IRA Custodian about whether you are eligible for the type of account that allows you to add Gold. Some plans prohibit this. In such cases, you must start a new IRA with silver-gold.
2. Make sure you choose a custodian who is familiar with administration of gold-silver IRAs. You can add silver/gold to most types IRAs.
3. To open a IRA with silver-gold, please send the completed paperwork to your custodian. Usually, charges will include a storage cost for any silver or golden coins you keep in an account. Under current IRS rules your gold must be stored in a depository that is approved by the IRS. It should be in a different location than your IRA’s custodian.
4. To fund your gold account initially, you can transfer funds to your IRA from your bank. If you wish to transfer funds from a retirement account (e.g. 401(k), or company retirement accounts), your custodian may help you. They can do this in as little as one day.
5. You may need to decide whether you want to buy gold mining stocks and silver and/or gold coins. If so, you will need to tell your custodian that they can purchase them from your account.
Current Tax Laws RE: Precious Metals In IRA Accounts
1. Collectibles are a good investment.
According to IRS, collector coins are prohibited transactions through an IRA account. You can purchase collectible coins with the funds in your IRA. It’s called a distribution of the exact amount you used to purchase them. The IRS will add this distribution to your gross tax income, and penalize you 10 per cent if it is below age 59 1/2.
2. Minted Coins, Exception
U.S. minted dollars are the only coins that allow precious metals to be included in IRA investment plans. To be eligible, the coins should contain no more than a quarter of a gram each of gold, silver, palladium or platinum metal. The gold coins must contain at least one-quarter of a tenth, one quarter, one-half, or a whole-one-ounce mixture. Silver coins of one-ounce are acceptable, and can be designated bullion. To avoid a penalty on any coins not listed as qualified minted investors under IRA regulations, they must be purchased using funds outside your IRA.