Gold IRA refers to an IRA account where the holders are allowed to buy precious metals and keep them with the help of a custodian. The metals allowed in the gold IRA account can be gold, silver, palladium or platinum. Before you decide to invest in gold IRA you should be well informed about gold IRA rules. This is necessary because failure to follow the rules can lead you into troubles. This can be seen where you will be charged penalties. The internal revenue service allows different investment options which will be guided by the gold IRA rules.
Gold IRA rules that you should know
- 1 Gold IRA rules that you should know
- 2 IRS guidelines you should know
- 3 Ira rules and regulations
- 4 What is an IRA?
- 5 You can have assets in your IRA account
- 6 Where to open an IRA account
- 7 How to invest in gold in your IRA account
- 8 What can you do with gold in your IRA account?
- 9 What is allowed in IRA investment?
- 10 Custodial maintenance
- 11 Contribution limits to the IRA
- 12 IRA penalties Exceptions
Gold IRA rules on Investment Choices
IRS prohibits use of collectible coins as an option in an IRA investment, but there is an exception where it only allows coins that have been minted by the US mints, the accepted gold coins have known value. This makes them acceptable. In order for a coin to be accepted as an investment in the gold IRA investment, it has to be in form of one ounce, half an ounce, quarter an ounce or even one tenth of an ounce of gold. One ounce silver coins are also accepted if they were only minted in the United States. According to the Treasury department, some bullions are accepted as IRs if only they were made from silver, gold, platinum, and palladium.
Custodial Maintenance according to gold IRA rules
After you decide to set up a gold IRA account, you will buy gold by the help of a custodian who will store them by a third party depository. The custodian himself is not allowed to store the physical gold. In case you decide as an investor to store your own gold, it will be considered as a case of distribution hence it will taxed which is unlike a case of running a gold IRA account.
Funding the IRA
You can decide to make contributions into an IRA inform of cash or by rolling over your already existing IRA account. The contribution in form of cash can be in form of annual contributions which can add up to $5,000. After you make the contributions into the gold IRA account, you will instruct the custodian on the coins and bullions for him to buy. Some custodian will not accept certain precious metals hence you should enquire first, for you to avoid breaking gold IRA rules.
IRS guidelines you should know
We have updated the guidelines to cover up to 2017. There are certain regulations on how IRA works, it is necessary to understand the working of the IRA so that you can make the right decision in your investment.
Ira rules and regulations
Not collector coins allowed
There are specific IRA eligible metals you can have in your account. Even if you buy an expensive collector coin, it may not be allowed in your gold IRA account. The tax payer relief acts of 1197 allowed inclusion of certain precious metals in your IRA account.
What is an IRA?
It is a tax deferred scheme used by workers to save for their retirements. The assets are stored in the account and you will not access them till you are age 59 and half. If you opt to withdraw early, there is a penalty but you will access the funds.
You can have assets in your IRA account
Some of the assets you can have in your account to enjoy tax deferment include the following:
Money market accounts
For you to enjoy a wide variety of investment options, you should check out services available in different companies before you open an account.
Before 1997 precious metals were not allowed, but nowadays you can have gold in your IRA account.
Where to open an IRA account
There are several banks and insurance companies which offer the investment options. You can as well contact companies which offer gold IRA services for you to invest. There are some companies which can allow you to add gold into your investment portfolio while others may require you to open a different gold IRA account.
How to invest in gold in your IRA account
If you had opened an IRA account which was initially intended not to accommodate precious metals, then you need to check with your account management company for you to know whether you can have some gold in the account.
What can you do with gold in your IRA account?
Gold is a measure of value. You can either liquidate it at market value or ask for physical gold for you to use for other needs.
What is allowed in IRA investment?
US minted gold coins
What is not allowed in gold IRA accounts?
Ineligible precious metals
You or your account management company will not handle gold. It is your custodian who will buy the physical gold and store it on your behalf.
Contribution limits to the IRA
For you to fund your IRA, you must do so by cash. You can use your annual contribution which can be up to $5,000 each year. You can increase the amount to $6,000 after you turn 50. Funding your IRA account can be a rolled over from another eligible account or via depositing money.
IRA penalties Exceptions
If you withdraw funds before age 59 and half, you attract fines. But there are several exceptions. Some of the exceptions include the following:
- When the IRA owner is disabled
- If the owner of the IRA dies and the beneficially starts to withdraw the funds
- When the owner is hospitalized and has no money or insurance to pay for the bills
- If the owner is unemployed and cannot cover for the insurance cost
- When the member of the IRA accountholder qualifies for education and there are no funds available
- If you decide to withdraw in an equal series for the rest of the life
- You can use $10,000 to buy your first home