Menu

INDUSTRY NEWS & ARTICLES

The Gold IRA: Buying Precious Metals (with Qualified Funds)

Jan 28, 2019

Precious metals include certain gold, silver, platinum, and palladium coins and bullion. Precious Metals purchased in a qualified account must adhere to applicable fineness and/or bullion standards as described in the Taxpayer Relief Act of 1997 and cannot be collectibles as described in Internal Revenue Service (IRS) Publication 590. An account owner cannot personally hold or store precious metals owned by the qualified account. The account owner has the option to select the depository at which to store the metals and can choose to hold them in segregated storage or in non-segregated (commingled) storage.

Precious Metals held in qualified accounts must meet minimum fineness requirements:

  • Gold must be .9950 pure
  • Silver must be .9990 pure
  • Platinum and Palladium must be .9995 pure

Examples of allowable precious metals include:

Gold

  • American Eagle coins
  • Australian Kangaroo/Nugget coins
  • Austrian Philharmonic coins
  • Canadian Maple Leaf coins
  • Credit Suisse – 0.999 PAMP Suisse bars
  • S. Buffalo uncirculated bullion coins
  • Various bars and rounds manufactured by a NYMEX or COMEX approved refiner/assayer or national government mint and meeting minimum fineness requirements

 Silver

  • American Eagle coins
  • Australian Kookaburra coins
  • Canadian Maple Leaf coins
  • Mexican Libertad coins
  • Various bars and rounds manufactured by a NYMEX or COMEX approved refiner/assayer or national government mint and meeting minimum fineness requirements

Platinum

  • American Eagle coins
  • Australian Koala coins
  • Canadian Maple Leaf coins
  • Isle of Man Noble coins
  • Various bars and rounds manufactured by a NYMEX or COMEX approved refiner/assayer or national government mint and meeting minimum fineness requirements

Palladium

  • Canadian Maple Leaf coins
  • Various bars and rounds manufactured by a NYMEX or COMEX approved refiner/assayer or national government mint and meeting minimum fineness requirements

 

Examples of unacceptable precious metals include:

  • Rare or collectible coins, including certified or “graded” coins
  • Austrian Corona
  • Belgian Franc
  • British Sovereign and Britannia
  • Chilean Peso
  • Dutch Guilder
  • French Franc
  • Hungarian Korona
  • Italian Lira
  • Mexican Peso
  • South African Krugerrand
  • Swiss Franc

 

You cannot participate in a prohibited transaction

When using retirement funds to invest in Precious Metals it is important for the qualified account owner to understand the IRS rules and regulations to avoid engaging in a prohibited transaction with a disqualified person that could lead to a complete distribution of the account with taxes and penalties incurred. A prohibited transaction is any improper use of the retirement account by the account owner, beneficiary or any disqualified person.

 

A “disqualified person” includes, but is not limited to:

  • Yourself
  • Your lineal ascendants and descendants
  • The spouse of a lineal descendant
  • Your spouse
  • Any entity that is owned 50% or more by disqualified persons
  • An entity that is controlled 50% or more by disqualified persons

 

Examples of prohibited transactions include:

  • Holding or storing the metals personally. For example, keeping the metals in a safe inside your home.
  • Selling metals you own personally to your qualified account.

DISCOVER THE POWER OF TRUE SELF-DIRECTED INVESTING

Our Self-Directed IRA allows you to invest in what you want, when you want. The investment possibilities are endless.

Discover the power of true self-directed investing

Our Self-Directed IRA allows you to invest in what you want, when you want. The investment possibilities are endless.

When using your qualified account to purchase Precious Metals, there are a few key items to remember:

  • You are responsible for performing due diligence on your investment. Every investment has unique risks and any decision to invest should only be made after you conduct a thorough review of the investment and any parties related to the investment. Provident Trust Group is a passive, directed custodian and as such does not provide any type of investment advice or due diligence.
  • You determine the precious metals dealer and depository. Provident Trust Group does not buy, sell or store Precious Metals.
  • All funds to purchase the metals must come from your qualified account.
  • The metals are shipped directly to the depository where they will be stored. The account owner cannot personally hold or store precious metals owned by the qualified account.
  • Expenses, such as shipping charges and storage fees, must be paid by the qualified account.
  • If you decide to sell your metals the proceeds must be paid to your qualified account.
  • You must provide a Fair Market Value of all assets held in your qualified account annually.

Required Documentation

  • Direction of Investment Form
  • Dealer Invoice
  • Depository Information (if not stored at Delaware Depository)

 

Investment Titling

You and your qualified account are two separate entities and your qualified account is considered the legal owner of this investment. As such, all documents must reflect this ownership. Failure to title the asset correctly may cause delays and/or tax consequences. The correct titling for all investment documents should be as follows:

“Provident Trust Group, LLC FBO: your name and account type

 

Resources

IRC Section 408(m)(3)(A)(i-iv) and 408(m)(3)(B)
https://www.law.cornell.edu/uscode/text/26/408

 

IRS Publication 590A – Contributions to Individual Retirement Arrangements (IRAs)
https://www.irs.gov/pub/irs-pdf/p590a.pdf

 

IRS Publication 590B – Distributions from Individual Retirement Arrangements (IRAs)
https://www.irs.gov/pub/irs-pdf/p590b.pdf

 

IRS Publication 598 – Tax on Unrelated Business Income of Exempt Organizations
https://www.irs.gov/pub/irs-pdf/p598.pdf

 

Internal Revenue Code 4975 – Tax on prohibited transactions
https://www.law.cornell.edu/uscode/text/26/4975

 

US Mint
www.usmint.gov

 

American Numismatic Association
www.money.org

 

 

Frequently Asked Questions

Q: Can I contribute Precious Metals I already own to my qualified account?

A: No. You can only contribute cash to your qualified account with annual contributions or through rollovers or transfers from other qualified accounts.

 

Q: Can my qualified account purchase Precious Metals that I own personally?

A: No. This would result in a prohibited transaction.

 

Q: Does Provident Trust Group dictate the depository I use?

A: No, you can select any depository, but there are depositories that Provident Trust Group currently holds metals with.

Q: Does Provident Trust Group have metals brokers that they work with?

A: Provident Trust Group will work with any metals brokers that the client selects.

 

Q: What is the difference between segregated storage or in non-segregated (commingled) storage for Precious Metals?

A: Segregated storage is when you choose to store your Precious Metals is a separate vault at the depository storing your metals. There are typically higher fees associated with this. Non-segregated (commingled) storage is when you choose to store your metals in a vault that also holds metals for other customers. Commingled vaults have sub-accounting in place for each customer to ensure appropriate accounting.

Please Note: Provident Trust Group and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Self-Directed Investing in an Unsecured Note (with Qualified Funds)

Sometimes called a Promissory Note or a Straight Note, an Unsecured Note is only guaranteed by the borrower’s promise to pay. The borrower signs a note, which may be as simple as a hand written agreement. Provident Trust Group requires the borrower’s signature to be...

Self-Directed Investing in a Limited Liability Company or Limited Partnership (with Qualified Funds)

Investing in a Limited Liability Company (LLC) or Limited Partnership (LP) has become a popular instrument and involves ownership interest in companies that are not publicly traded on a stock exchange. Investors in LLCs are called members while investors in LPs are...

Self-Directed Investing in a Secured Note or Mortgage (with Qualified Funds)

A Secured Note or Mortgage is a promissory note that is guaranteed by an interest in an asset that is worth as much or more than the amount of the loan. In most cases, if the borrower defaults on the loan, the qualified account will become the owner of the asset...

Self-Directed Investing in a Single Member LLC (with Qualified Funds)

A Single Member LLC, also known as an IRA-LLC, is a type of alternative investment where a private entity is wholly or majority owned by an IRA. After the LLC has been created, qualified funds from your retirement account are moved or invested into the newly created...

The Gold IRA: Buying Precious Metals (with Qualified Funds)

Precious metals include certain gold, silver, platinum, and palladium coins and bullion. Precious Metals purchased in a qualified account must adhere to applicable fineness and/or bullion standards as described in the Taxpayer Relief Act of 1997 and cannot be...

Uncommon Self-Directed Investments You May Not Know About

As Self-Directed Investments within IRAs, become more popular due to the increased volatility of the stock market, many savvy investors have discovered the investment opportunities available into Real Estate, Private Businesses, and Promissory Notes. The investment...

Do you Have Questions? Let us know!

Existing Clients
(888) 855-9856

Future Clients
(888) 662-0869

WHO WE ARE

With more than 34,000 clients in all 50 states, our elite team of professionals is the premier choice. We offer highly personalized service tailored to your needs, transforming your financial future.

CONTACT US

OUR ADDRESS

8880 W. Sunset Rd.,
Suite 250
Las Vegas, NV 89148

i

FAX

(702) 253-7565

}

HOURS OF OPERATION

Monday - Friday
6AM - 4PM (PST)
 

EMAIL

info@trustprovident.com

Provident Trust Group, LLC is a BBB Accredited Management Consultant in Las Vegas, NV