Gold IRA Tax Rules You Need To Follow


Ever since it first appeared, gold has been highly esteemed by people. The human civilization has basically been fascinated with precious metals for a long time now and that’s not about to change. In fact, nowadays, gold is one of the most traded commodities in the world. On top of that, it has become a great alternative investment for a lot of people. Read this guide to learn how investing in gold works.

Now, I believe it’s safe to assume that you have already heard about the option of opening up an Individual Retirement Account (IRA), and a self-directed one for that matter, that will allow you to make these investments and hold gold and other precious metals. If you decide to go for this option, then you will definitely be taking a good step, since you’ll secure your financial future. Yet, you should be aware of all the rules before you even get started.

There are, of course, a lot of rules that you will have to be aware of. For example, as mentioned above, in order to be able to make these investments, you will need to open a self-directed account, as other accounts won’t allow you to do that. Then, there is also the fact that you will have to get a custodian, since you won’t be able to hold your gold physically, and a custodian will take care of the storing and protection process for you.

Of course, among other things, you will also have to be aware of certain IRS and tax rules, so that you can know how to go through this whole process without getting in trouble with the IRS. I suppose that your goal isn’t to get in trouble with anyone, which is why there are those rules that need to be followed. In case you aren’t acquainted with those rules yet, I suggest you keep on reading, so that I can give you a better idea of the regulations that you should comply with. So, here we go.

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You Need A Custodian To Set Up Your Account

If you have been paying attention to what I have been saying above, then you already know that you won’t be able to add any gold to your retirement plan if you first don’t get a custodian. Learning how to comply with the gold IRA tax rules will practically be unnecessary if you don’t find a custodian first and then open up your special IRA. Finding the right company to partner up with, though, can turn out to be a bit tricky, which is why you should take your time and do proper research before going any further.

You Cannot Deposit What You Own

Now, here is another rule that you will have to keep in mind before you decide to do this. If you thought that you can deposit the metals that you already own into your IRA, then you were wrong. I know that this might sound like the logical thing to do, but the truth is that the rules don’t allow it. That’s the law and we all need to comply with it. So, in case you had the idea to deposit your own precious metals into this account, you should understand right away that this is impossible.

Stick With Acceptable Purchases

Apart from the rule above, stating that you cannot deposit the coins you own and that you need to buy new ones, there is another rule that tells you precisely which purchases you can and cannot make. The IRS actually has precise rules regarding the purity of the metals that you are buying. In simple words, the metals you buy need to be at least 99.9% pure, so make sure to remember this when deciding which gold bullions to buy.

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In addition to that, even after following those purity guidelines, you should keep in mind that there are certain types of gold, silver and other precious metals that you simply won’t be able to place into your account. Those include certain rare coins, as well as those coins that are considered to be “numismatic” collectibles. The bottom line is that there is a list of coins that are allowed, and a list of those that aren’t. Of course, there are always some exceptions to those rules.

That is why your best possible option is to talk to your custodian about this and let them give you the advice you need on what to do. This brings us back to the conclusion we have already made above. Choosing the custodian is the most important thing to do, so be careful when making this specific choice and do your research properly.

Here are some more rules that you should keep in mind: 

Different Taxation For Traditional & Roth Options

As for taxation, you should know that the process is different for the traditional and the Roth accounts. Basically, when you have a traditional IRA, your assets are taxed when you withdraw them from the account. On the other hand, if you have a Roth IRA, everything is taxed upon being deposited. Putting your funds in both of these accounts generally seems to be the best possible idea and people usually resort to it. These accounts can offer tax-free growth over time, which is precisely what makes them so popular and which is why people are increasingly becoming interested in adding gold to their IRAs.

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