Can you keep IRA gold at home? What the law and the courts say

What the tax code requires

Section 408(m) of the tax code treats most coins and metals as collectibles. When an IRA buys a collectible, the IRS counts the purchase price as a distribution to you, taxed as income and, if you’re under 59½, usually hit with a 10% additional tax.

The exception that allows gold IRAs covers certain U.S. Mint coins and bullion that meets minimum purity standards. For bullion, the law adds a condition: it has to be “in the physical possession of a trustee” of the kind the IRA rules require, which means a bank or a company on the IRS’s list of approved nonbank trustees. You don’t qualify as your own trustee.

Some promoters argue that because the possession wording is attached to bullion, American Eagle coins can sit in your closet. The case the Tax Court decided in 2021 involved exactly those coins, and the owner lost.

The McNulty case

Donna McNulty set up a self-directed IRA through a company that sold “checkbook” IRA arrangements. Her IRA became the sole owner of an LLC, she moved about $427,000 from retirement accounts into it, and the LLC bought American Eagle gold coins. The coins were shipped to her, and she kept them in a safe at home with other coins she owned personally.

The Tax Court ruled that the coins were distributions to her: $374,000 in 2015 and $37,380 in 2016. The LLC paperwork didn’t change the outcome. The court said personal control over IRA assets by the IRA owner goes against the very nature of an IRA, and McNulty could use the coins however she wanted. It also upheld accuracy-related penalties, finding that material from an internet-based promoter wasn’t reliable professional advice and noting that the couple hadn’t asked their own CPA.

The case is McNulty v. Commissioner, 157 T.C. No. 10 (2021).

How “home storage IRA” pitches usually work

The structure varies, but it usually looks like this:

1. Your IRA forms an LLC, and you’re named its manager.
2. The IRA’s money goes into the LLC’s bank account, which you control with a “checkbook.”
3. The LLC buys coins or bars, and you keep them at home or in a safe-deposit box you can open.

The problem is the last step. Whether the metal sits in a home safe or a box that only you can open, you have personal control over it, and that’s what sank the McNulty arrangement.

How IRA metal is actually stored

A qualified IRA custodian arranges storage at a depository, an insured vault that specializes in precious metals. You choose between commingled storage, where your metal is pooled with other customers’ metal of the same kind, and segregated storage, where your specific coins or bars are kept apart. Segregated storage usually costs more. Our gold IRA guide covers the rest of the setup, and gold IRA fees shows what storage costs.

If you want gold you can hold

You have two clean options:

• Buy it outside an IRA. Metal you buy with after-tax money, such as bullion coins, is yours to keep wherever you like. When you sell at a gain after holding it more than a year, the IRS taxes it as a collectible, at a maximum federal rate of 28%.
• Take it out of your IRA. A distribution “in kind” lets the custodian ship coins or bars to you. Their market value that day is taxed like any other IRA distribution, plus the 10% additional tax if you’re under 59½ and no exception applies.

Frequently asked questions