Checkbook-Control Precious Metals & Coins

Precious metals have a history of maintaining their value over time and during times of finanacial uncertainty. Precious metals, gold in particular, have proven to be an excellent investment in the face inflation, deflation, and geopolitical crises. Investing in precious metals provides diversification to your portfolio as they have done well when stocks underperformed. Direct control of valuable assets that have universal value can provide assurance during turmoil.

Although investment in collectibles is generally precluded under Section 408(m), Section 408(m)(3) contains carve-outs allowing investment in coins and bullion that meet specific requirements.

Permitted coins include:

Gold Coins: Gold American Eagles, U.S. Buffalo bullion coins, Gold Canadian Maples, Austrian Philharmonic bullion coins, Australian Kangaroo/Nugget bullion coins.

Silver Coins: Silver American Eagles, Silver Canadian Maples, Austrian Vienna Philharmonic bullion coins, Australian Kookaburra bullion coins, Mexican Libertad bullion coins.

Platinum Coins: Platinum American Eagles, Platinum Canadian Maple Leaf bullion coins, Australian Koala bullion coins.

Palladium: Palladium Canadian Maple Leaf bullion coins.

Permitted bullion must meet certain fineness standards:

Gold: .9950

Silver: .9990

Platinum: .9995

Palladium: .9995

Checkbook Precious Metals Compliance

Custody of coins and precious metals: Permitted bullion must be held by a regulated financial institution. A close reading of the law indicates that this requirement does not apply to American Eagles that are permitted coins. In the absence of clear IRS guidance we recommend using a bank safe deposit box held in the name of your IRA-LLC, Solo 401(k), or Defined Benefit Plan to hold all coins and precious metals.

Tax Code: IRA and Qualified Plan Investment in Coins & Bullion

Carve-outs permitting retirement account investment in certain coins is provided in Section 408(m)(3)(A) and for investment certain metals in Section 408(m)(3)(B).

Following are the definition of permitted coins and bullion according to the Tax Code.

Allowable Coins: Section (408)(m)(3)(A)

(i) a gold coin described in paragraph (7), (8), (9), or (10) of section 5112(a) of title 31, United States Code,
(ii) a silver coin described in section 5112(e) of title 31, United States Code,
(iii) a platinum coin described in section 5112(k) of title 31, United States Code, or
(iv) a coin issued under the laws of any State

Allowable Metals: Section 408(m)(3)(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.”

Can I take possession of precious metals & coins purchased by my Checkbook-Control Retirment Account?

There is a case to be made that you may take physical possession of such items purchased by an IRA-LLC, particularly permitted American coins. However, we strongly recommend holding all precious metals and coins in a bank safe deposit box titled in the name of the investing entity. For added regulatory certainty, it may be advisable to store such items at an approved depository.