Self-Directed IRA Owners: Beware Of This Gold Mistake

The vast majority of Self-Directed IRA transactions occur without a hitch. But you need to know the rules – or at least have someone in your corner who knows the rules. This is especially true with gold and precious metals purchased with IRA funds, because there are a number of special rules that apply specifically to these types of investments that simply don’t come up for the vast majority of investors.

For example, one woman who wanted to own gold in her Self-Directed IRA found that her custodian that handled her other investments did not handle gold. So she contacted a gold broker/precious metals company and asked if she could buy the gold through them and place it to the IRA.

The precious metals company told her yes, they could get the gold for her, but she should speak with a financial advisor first because the funds were Self-Directed IRA funds.

The woman withdrew cash from her IRA and purchased the gold through the gold company, and took physical possession of a number of gold coins.

Normally, you can buy an asset with IRA funds, hold it outside the Self-Directed IRA, and return the cash you withdrew within 60 days to avoid the IRS characterizing the withdrawal as a taxable distribution, triggering income taxes and penalties.

But she wasn’t able to raise the cash to place back in her IRA in time, and so she did not complete an IRA rollover within the allotted 60 day period, however, and wrote to the IRS, requesting an extension of the 60 day rollover period, because she claimed she received incorrect advice from her financial advisor.

In Private Letter Ruling (PLR)201535026 from August of 2015, the IRS denied her request. They rejected her claim that she had received bad advice, since her advisor with her IRA company had told her up front that she could not hold gold with them, and the gold company told her to get additional advice before making a transaction.

Generally, investors cannot take personal possession of gold, silver, platinum, or other valuable items their IRAs own. Instead, you must find a custodian to hold those assets on your behalf.

Yes, the gold company TV commercials show pictures of people sitting at their dining room tables looking at their gold coins. But generally you cannot keep IRA gold or other precious metals in a safe in your house.

If you want to own physical coins or bullion, you have to make sure that the gold or bullion you purchase are of sufficient purity to qualify for Self-Directed IRA accounts (not all of them are!) and you have to identify a qualified custodian to secure and store the gold on your behalf.

Of course, they don’t do this for free; You will have to pay a small fee for their services.

That’s why it’s important to engage the services of a qualified and experienced custodian or administrator before you make any major transactions. American IRA, LLC has many clients who are successfully using gold and other precious metals within their IRAs and other retirement accounts.

If you are considering integrating gold, silver, platinum or other precious metals in your retirement accounts, we would like to work with you. Before you make any moves, give us a call at 866-7500-IRA(472) for a no obligation consultation. Also, please visit us on the web at and peruse our library of informational articles and topical ebooks and brochures.

We look forward to working with you.