The price of gold has risen so sharply in the past 10 years that you might want to hold some gold in your IRA. If so, be cautious. Gold is considered a collectible, the same as artworks and rare stamps and antique furniture.
Collectibles are not allowed to be held in IRAs. Say you invest $5,000 in gold bars for your IRA. Under the tax code, your investment will be treated as a $5,000 taxable distribution from the IRA.
You’ll owe tax on $5,000 of income and probably a 10 percent penalty before age 59-1/2. You’ll owe tax again when you take the gold bars out of your IRA. Nevertheless, there are ways to get around this prohibition, if you truly want gold in your IRA.
* Some gold bars and coins are allowed in IRAs, if they meet certain rules. American Eagle coins are on the list of acceptable investments.
* You can invest in gold mining stocks or funds that hold these stocks. They’re allowed in IRAs, like all stocks and stock funds.
* Some exchange-traded funds (ETFs) invest directly in gold bullion. They’re allowed in IRAs. Examples include SPDR Gold Shares and iShares COMEX Gold Trust.
