To use an IRA to invest in gold, you'll need to follow two IRS guidelines. First, you can only invest in IRS-approved gold. Although the list of approved options changes, the IRS says they must be “highly refined ingots. Not all investments in gold can be owned by an IRA.
The basic rule is that an IRA cannot own a collector's item, and precious metals are defined as collectibles, whether the investment is in bars or coins. Fortunately, there are exceptions to the general rule for gold, silver, platinum, and palladium that is held in certain forms. After deciding on a self-directed IRA Custodian, you should ask what types of gold you can invest in. Although you are allowed to invest in gold and other precious metals in an IRA, there are some regulations.
In general, the IRS allows IRA investors to invest in gold and other investments in alternative assets, such as real estate, tax liens, and more. The Internal Revenue Code has stipulations for what type of gold and other precious metals investors can buy, but apart from these few stipulations, it is legal to buy gold with a self-directed IRA. Therefore, owners of self-directed IRAs cannot take physical possession of the gold coins held by their IRAs. They can invest in gold coins, but the coins must remain in the custody of the trustee or custodian of the IRA.