Silver Rises Over 120% YTD 
Published: 08-26-2026, 02:37 pm
A precious metals IRA holds physical gold or silver under the same tax rules as any other IRA. But one condition overrides the rest. A bank or an IRS-approved trustee must keep physical possession of the metal. So if you buy an eligible coin and store it in your own safe, the IRS treats the whole position as distributed.
According to the IRS, an IRA may hold gold, silver, platinum or palladium bullion of a set fineness. However, that holds only if a bank or an approved non-bank trustee keeps physical possession of it. The rule sits in Internal Revenue Code Section 408(m)(3). And when a retirement account buys a collectible outside that exception, the IRS says the participant is deemed to receive a distribution in the year of purchase. It is valued at cost. It is reported on Form 1099-R. The United States Tax Court applied the rule in McNulty v. Commissioner, 157 T.C. No. 10, decided November 18, 2021. Coins kept in a home safe became a taxable distribution, even though the coins were eligible holdings. So eligibility describes what you may buy. Custody decides whether you still own it inside the account.
Key Takeaways
- Two separate tests govern a precious metals IRA. Metal has to pass only one of them. But custody applies either way.
- Everyone quotes 99.5% for gold and 99.9% for silver. Yet Internal Revenue Code Section 408(m)(3)(B) never names those figures. It points at futures-market delivery standards instead.
- America’s most popular IRA gold coin is 91.67% pure. So it fails that fineness test. It qualifies because Congress named it.
- Taking personal possession is not a storage preference. In McNulty v. Commissioner, decided November 18, 2021, it turned the whole holding into a taxable distribution.
- IRS Notice 2025-67, announced November 13, 2025, sets the 2026 IRA limit at $7,500, or $8,600 if you are 50 or older.
What Is a Precious Metals IRA?
A precious metals IRA is not a separate account type in the tax code. It is an ordinary IRA, usually self-directed, holding bullion instead of funds and shares. Contribution limits are the same. So are distribution rules, and so is the extra 10% tax if you withdraw before age 59 and a half.
What changes is the plumbing. A brokerage can hold a mutual fund as an electronic entry. But nobody holds a gold bar as an electronic entry. So the account needs a custodian willing to administer a physical asset. It also needs somewhere for that asset to physically sit.
Most of the muddle in this category lives in that second requirement. The tax treatment rests on it. For the mechanics of the wrapper itself, our complete guide to self-directed IRAs walks through the setup path.
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Which Metals Qualify for a Precious Metals IRA?
Start with the default rule, because the exception only makes sense against it. Internal Revenue Code Section 408(m) bars IRAs from holding collectibles. And coins and metals count as collectibles. If the statute stopped there, no IRA could hold an ounce of gold.
Section 408(m)(3) then opens two doors. A holding needs to walk through only one.
The first door is a list. Congress named specific coins by cross-reference to Title 31 of the United States Code, Section 5112. Any coin issued under the laws of a state also qualifies. So American Eagles come in this way.
The second door is a purity standard. Bullion qualifies if its fineness meets or beats the minimum a regulated futures market requires for delivery. In practice Section 408(m)(3)(B) means 99.5% for gold and 99.9% for silver.
Now notice what follows. The numbers the industry quotes as “the IRA purity rule” are not in the tax code at all. Section 408(m)(3)(B) points at commodity-exchange delivery specifications. Those specifications supply the figures.
Here is the part that should change how you read any eligibility list. The American Gold Eagle is a 22-karat coin, or roughly 91.67% fine gold. So it is nowhere near 99.5%. It is eligible anyway, because Congress wrote it into Section 408(m)(3)(A) by name. By contrast, a Silver Maple Leaf at 99.99% fine clears the Section 408(m)(3)(B) purity test on its own.
So “IRA-approved” does less work than the phrase suggests. It tells you a product passed one of two unrelated tests. But it says nothing about whether your account is compliant. For silver-specific thresholds, our silver IRA guide covers the rules, limits and custodians.
Why Can’t You Store a Precious Metals IRA at Home?
Because the exception that lets your IRA own metal only works while a trustee physically holds it.
Read the second door again. Bullion escapes the collectibles ban if it meets the fineness standard. But it must also sit in the physical possession of a trustee described under subsection (a). That trustee is a bank or an IRS-approved non-bank trustee. So the possession clause is not security advice. It is a condition of the exemption.
This was tested, and the taxpayers lost. In McNulty v. Commissioner, a couple set up self-directed IRAs and directed them into a single-member LLC. The LLC bought American Eagle coins. Then they stored roughly $411,000 of those coins in a safe at home. The purchases were documented. The coins were titled to the LLC. They were otherwise permissible investments. None of it mattered. Judge Robert Goeke found that physical possession gave the owner unfettered control. Receipt of the coins, the court held, was a taxable distribution equal to their purchase price. The IRS also asserted accuracy-related penalties.
This structural point generalizes past one case. Section 408(m)(3) is an exception to a prohibition, and courts read exceptions narrowly. So an LLC wrapper does not widen one. Permitted metal plus improper possession does not give you a permitted holding. Instead it gives you a distribution, dated to the year you took the coins.
Anyone marketing a home-storage IRA is selling you the first test and skipping the second.
What Do the Numbers Look Like in 2026?
Account limits are ordinary. For 2026 you can contribute $7,500, or $8,600 if you are 50 or older. The IRS set those figures in Notice 2025-67, announced November 13, 2025. And traditional and Roth balances share the one cap.
The market is less ordinary. GoldSilver’s live gold price put gold in the mid-$4,500s in late August 2026. That is roughly 18% below gold’s intraday spot record of $5,589.38, set on January 28, 2026. The LBMA afternoon benchmark for January 28, 2026 peaked lower, nearer $5,405, which is why two records circulate. Meanwhile GoldSilver’s live silver price sat in the high $60s after a violent year. So if you are moving a slice of a retirement balance, those prices decide how many ounces the transfer buys.
They also explain why custody deserves attention. Storage is a recurring line item, but almost always the smallest number in the structure. Our breakdown of what gold storage costs puts real figures against it. Then set that cost beside the tax consequence of getting possession wrong. The comparison stops being close.
What Do Most Investors Get Wrong About IRA Custody?
The surface take is simple. Buy approved metal, store it at an approved depository, and treat the depository as a cost to minimize.
But that is incomplete in a precise way. The word “approved” attaches to the metal in every marketing sentence you will read. Yet the statute’s operative condition attaches to the holder. So you can get the product list perfectly right and still break the account.
Here is the deeper dynamic. The custodian is not a service bolted onto your holding. Instead the custodian is the reason the holding is legal. Your metal enjoys tax-advantaged treatment only while a qualifying trustee physically has it. So third-party custody is the load-bearing wall, not the trim. That is why the choice between segregated, allocated and pooled arrangements repays a careful read. Our guide to segregated, allocated or pooled storage covers what each means for what you own.
It also reframes the question. Not how to minimize storage fees. Instead ask who holds title, who holds the metal, and whether you can prove both. Serious institutions ask that about any custodial asset. Retail investors are rarely handed the framework. According to Gallup’s 2025 polling, nearly one in four Americans calls gold the best long-term investment. Yet almost nothing in that coverage explains who is legally required to hold it. Belief has arrived. The mechanics have not.
So this piece is not a product comparison. For the form-level decision, we laid out gold IRA versus physical gold separately. The vault storage and precious metals IRA pages describe how custody works in practice. The framework above lets you judge any of them, including ours.
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Frequently Asked Questions
Yes. An IRA can hold gold named on the statutory coin list in Internal Revenue Code Section 408(m)(3)(A). It can also hold gold meeting the bullion fineness threshold in Section 408(m)(3)(B), which for gold is 99.5%. But both paths carry the same condition. A bank or an IRS-approved non-bank trustee must keep physical possession. So you cannot buy eligible gold for your IRA and then hold it yourself. According to the IRS, buying a non-exempt collectible counts as a distribution in the year of purchase, valued at cost and reported on Form 1099-R.
Gold must be at least 99.5% fine and silver at least 99.9% fine. Those thresholds qualify metal as bullion under Internal Revenue Code Section 408(m)(3)(B). And the figures come from the minimum delivery standards of a regulated futures market, which the statute references rather than restating. Platinum and palladium sit at 99.95% under the same subsection. But one caveat matters. A coin can be eligible without meeting any of these numbers if Congress named it directly. That is how the 91.67% American Gold Eagle qualifies.
No. In McNulty v. Commissioner, 157 T.C. No. 10, decided November 18, 2021, the United States Tax Court ruled against IRA owners who took physical possession of American Eagle coins bought through an IRA-owned LLC. Roughly $411,000 of coins sat in a home safe. The court treated receipt of the coins as a taxable distribution equal to their purchase price. Neither the LLC structure nor the paperwork changed the outcome. Judge Robert Goeke found that personal possession amounted to unfettered control. So home storage of IRA metal is not a recognized structure.
IRS Notice 2025-67, announced November 13, 2025, sets the 2026 limit at $7,500, rising to $8,600 if you are 50 or older. And the cap is shared across all traditional and Roth IRAs you hold, not applied per account. So a precious metals IRA gets no special allowance. Larger sums usually move through a transfer or rollover instead.
A bank, or a non-bank trustee the IRS has approved for that role. In practice the metal sits in a third-party depository the trustee designates. But the distinction matters more than it looks. Internal Revenue Code Section 408(m)(3) requires possession by a trustee. So a custodian cannot hand storage to any warehouse and satisfy it. When you assess a provider, ask who the approved trustee is and where the metal rests.
Taking physical delivery is a distribution. In a traditional IRA the value comes out as ordinary income that tax year. And an extra 10% tax generally applies below age 59 and a half. This holds whether you intended a distribution or simply wanted the coins at home. That is the trap McNulty v. Commissioner illustrates. So if you want metal you can hold, buying outside a retirement account avoids the problem.
SOURCES
1. Internal Revenue Service — Investments in Collectibles in Individually Directed Qualified Plan Accounts
2. Legal Information Institute — 26 U.S. Code § 408: Individual Retirement Accounts
3. Legal Information Institute — 31 U.S. Code § 5112: Denominations, Specifications, and Design of Coins
4. Tax Notes — Coins in IRA Owner’s Possession Were Taxable Distributions: McNulty v. Commissioner, 157 T.C. No. 10, November 18, 2021
5. Internal Revenue Service — 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 (Notice 2025-67, November 13, 2025)
6. Gallup — Stocks Fall, Gold Rises; Real Estate Still Best Investment, May 5, 2025
7. GoldSilver — Live Gold and Silver Price Charts, accessed August 26, 2026
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions.
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