Friday, February 27, 2009

CAN I PUT GOLD COINS IN MY IRA?

Because of the economic downturn over the last few months my IRA has taken a big hit. I was thinking about moving from mutual funds to gold coins. One of the guys at coffee said that IRAs could not be invested in gold coins. Is he correct?Justin

Justin, you aren't the only one that took a hit. Before I answer your question I want to make sure you realize that I am not a investment advisor. I am not making any type of judgement for or opposed to investing in gold. If I knew exactly how to invest I would not be sitting in my office but rather on the beach.

Okay, so much for the disclaimer.

It is possible for your IRA account to hold gold coins. Realize that you cannot actually hold them, they must be held by your IRA trustee. For example if you have $30,000 left in your IRA that is held by the Forth National Bank, the bank trust department that administers your IRA would have to purchase and keep the coins in the name of your IRA account. I presume that you could occasionally go to the bank and touch and fondle the coins but they could not be in your possession.

What is probably confusing the "expert" at the coffee shop (there seem to be a lot of experts at the coffee shop) is that the law states:

The acquisition of an IRA of any collectible is considered a distribution and therefore taxable. The law goes on to list precious metals as a collectible. But... to make things confusing the law later states that gold and silver coins are not considered collectibles. Go figure.