Jeff Nabers’ Self Directed IRA & Solo 401(k) Blog

Precious Metals for Keeps April 9, 2008

With gas prices and virtually every other cost of living rising, responding to the declining dollar is something we all have probably thought about by now. One option available to us all is precious metals: namely gold, silver, and platinum.

The trick with getting metals into a retirement plan is in the Internal Revenue Code section that deals with collectibles. Strangely enough, it’s not in section 4975 (which deals with prohibited transactions); it’s in 408 which deals with IRAs. Even more odd is the fact that one part of this section is applicable to self directed qualified plans (like a Solo 401k) with no reference to its applicability within the code sections for qualified plans. This is why tax attorneys have work to do.

In 408(m)(2), they prohibit investment into collectibles and further define collectibles to include any metals or coins. 408(m)(3) goes on to exclude certain coins and bullion from being defined as “collectibles” for the purposes of disallowed investments. It breaks these “certain coins and bullion” down into two categories. (A) is essentially American Eagle coins minted by the United States. (B) is bullion that that meets or exceeds the fineness required by regulated futures contracts if such bullion is in possession of a custodial account at a bank or trust company.

So when it comes to Self Directed IRAs and Solo 401(k)s, it appears that American Eagle coins are allowable for (more…)