Gold Coins for IRA

[jazz4cash]

A family member decided he wants to purchase gold coins and use them to open an IRA for his adult child. I told him I thought possession of the coins could be a problem, i.e. custodial requirements of the IRA. He doesn't "get" it, and keeps telling me how you can now put gold in an IRA. I did a general search and found one site that indicated only certain coins qualify, and there is a custodial storage fee (100/yr)..........
Before I spend too much energy on this (in case I am wrong!), can anyone advise or provide a website with the details?

Edit: the really interesting part about this for me is that after all these years, this
family member is now starting to seek my thoughts on financial matters and he
thinks this idea is pretty cool

 

[riskadverse]

While you can hold gold assets in an IRA, you cannot have the physical gold in your possesion. There is a whole underground economy in gold and you could start your own "IRA" by buying gold coins without a paper trail, letting the value of the coins grow tax free, and then sell the gold piecemeal without creating a paper trail. Even though Uncle Sam would be unaware of your profit, you would be duty bound to report it. There are a number of risks in doing this - counterfit coins; being ripped off on the buy or sell; and being ratted out. I would probably just hold the ETF "GLD" in my IRA, and avoid all the cloak and dagger stuff.

 

[jazz4cash]

yup....I thought of some of those issues, but never considered the underground economy part.....makes sense tho...I suggested the gold fund, but only think I can figure is he thinks the coins are more emotional since its basically a gift...kinda like jewelry. I found the 100 pg IRS pub 590 and theres alot of issues with collectables (details for the exceptions to the exceptions, blah, blah, blah). Interestingly, you can't put the gold into an IRA (except via transfer), but apparently you can purchase gold with financial assets that are already within an IRA, so that refines some issues relating to cost basis and papertrail. Anyway, thanks riskaverse

 

[mathjak107]

i once bought gold eagles from fidelity investments outside my ira and took possession of them. what a bad move, first off because fidelity had an office in new york i had to pay sales tax unknowingly. then i couldnt find anywhere that would buy them back from me for anywhere near spot.

i ended up taking them to deak international who gave me something like spot less 10%.

ill never buy and take possession again , ever

 

[magellan_nh]

You can buy and sell gold eagles for more than spot at this site:
http://www.bulliondirect.com

Check out the "Nucleo" exchange.

I haven't personally tried it, but the site has been around for several years so I don't think it's fly-by-night or anything.

 

[Craig]

Check out Pub. 590 from www.irs.gov, page 45 ... you can use American Eagles. But I can't imagine why someone would put coins into an IRA ... they can just buy them and gift them to be held as a keepsake and investment.

Had a friend into this, and he just purchased from local coin shops ... said it was no big deal.