Education, not advice. Poverty Sux does not sell gold, does not run retirement accounts and is not paid by any dealer or custodian. Every rule below links to the law or official page it comes from.
Dealer websites are full of "IRA-approved" labels. The Internal Revenue Service does not approve individual products. What it applies is one short paragraph of the tax code, section 408(m), plus the coin specifications in a different title of the United States Code and the delivery rules of the futures exchanges. This guide walks through those pieces in plain words so you can read any "approved" label with a critical eye.
For how the account works overall, start with how a gold IRA works.
Step one: metal starts out as a "collectible"
Section 408(m) says that when an individual retirement account buys a collectible, the purchase is treated as a distribution equal to its cost. The list of collectibles includes works of art, rugs, antiques, "any metal or gem," "any stamp or coin," alcoholic beverages and other tangible property the Treasury specifies (26 U.S. Code § 408).
So by default, gold is a collectible. The Internal Revenue Service spells out the consequence: the amount invested is considered distributed in the year invested, and you may owe the 10% additional tax on early distributions (Internal Revenue Service). Its collectibles page adds that buying a collectible can also be a prohibited transaction (Internal Revenue Service).
Step two: the two exceptions
Section 408(m)(3) then carves out two exceptions (26 U.S. Code § 408).
Exception A, certain coins. A coin is not a collectible if it is:
- a gold coin described in paragraph (7), (8), (9) or (10) of 31 U.S. Code § 5112(a);
- a silver coin described in 31 U.S. Code § 5112(e);
- a platinum coin described in 31 U.S. Code § 5112(k); or
- a coin issued under the laws of any state.
Exception B, bullion. Gold, silver, platinum or palladium bullion is not a collectible if its fineness equals or exceeds the minimum fineness a regulated futures exchange requires for delivery, and the bullion is in the physical possession of a trustee.
Publication 590-A summarizes the same rule as one, one-half, one-quarter or one-tenth ounce United States gold coins, one-ounce silver coins minted by the Treasury Department, certain platinum coins and certain gold, silver, palladium and platinum bullion (Internal Revenue Service, Publication 590-A).
The coin list, in a table
Here is what the referenced paragraphs of 31 U.S. Code § 5112 actually describe (31 U.S. Code § 5112):
| Paragraph | Face value | Diameter | Total weight | Precious metal content | In the 408(m) coin list? |
|---|---|---|---|---|---|
| 5112(a)(7) | $50 gold | 32.7 millimeters | 33.931 grams | One troy ounce of fine gold | Yes |
| 5112(a)(8) | $25 gold | 27.0 millimeters | 16.966 grams | One-half troy ounce of fine gold | Yes |
| 5112(a)(9) | $10 gold | 22.0 millimeters | 8.483 grams | One-fourth troy ounce of fine gold | Yes |
| 5112(a)(10) | $5 gold | 16.5 millimeters | 3.393 grams | One-tenth troy ounce of fine gold | Yes |
| 5112(e) | One dollar silver | 40.6 millimeters | 31.103 grams | .999 fine silver | Yes |
| 5112(k) | Platinum, as the Secretary prescribes | Set by the Secretary | Set by the Secretary | Set by the Secretary | Yes |
| 5112(a)(11) | $50 gold | Set by the Secretary | 1 ounce | 99.99 percent pure gold | No (see below) |
| 5112(a)(12) | $25 palladium | Set by the Secretary | 1 troy ounce | .9995 fine palladium | No (see below) |
Why the gold coins on the list do not need to be 99.5% pure
The paragraph (7) coin weighs 33.931 grams but contains one troy ounce of fine gold. Since one troy ounce is about 31.10 grams, the coin is roughly 91.7% gold by weight (our calculation from the statute's figures). That is below the 995 fineness the gold futures contract requires (see the next section). It does not matter, because these coins qualify under the coin exception by name, not under the bullion fineness test.
Two coins that are not on the list
Paragraphs (11) and (12) were added to section 5112 but are not among the paragraphs section 408(m)(3)(A) names. Read literally, a 99.99 percent pure gold coin under paragraph (11) or a .9995 fine palladium coin under paragraph (12) would have to qualify under the bullion exception instead. Both appear to exceed the relevant futures fineness minimums listed below, but whether a legal-tender coin counts as "bullion" for this purpose is a question the sources we read do not answer directly. Treat that as an open question for your custodian and a qualified tax professional, not as a green light.
The bullion fineness test
Section 408(m)(3)(B) ties the bullion standard to whatever a regulated futures exchange accepts for delivery. The main United States contracts are run by CME Group:
| Metal | Contract rulebook | Minimum fineness for delivery |
|---|---|---|
| Gold | COMEX Chapter 113, Gold Futures | 995 fine (99.5%) |
| Silver | COMEX Chapter 112, Silver Futures | 999 fine (99.9%) |
| Platinum | NYMEX Chapter 105, Platinum Futures | 99.95% pure |
| Palladium | NYMEX Chapter 106, Palladium Futures | 99.95% pure |
Sources: COMEX Chapter 113, COMEX Chapter 112, NYMEX Chapter 105 and NYMEX Chapter 106 (CME Group). The gold contract is for 100 troy ounces, delivered as one 100-ounce bar or three one-kilogram bars; the silver contract is for 5,000 troy ounces.
In plain words: a gold bar or round of at least 99.5% purity can meet the fineness part of the test; silver needs 99.9%; platinum and palladium need 99.95%. Foreign coins and privately minted bars are not on the coin list, so under the statute they would have to rely on this fineness test. The statute itself does not require the product to be a size that can be delivered on the exchange; it refers to the minimum fineness only.
The storage condition
The bullion exception has a second half that people skip: the metal must be in the physical possession of a trustee. The Internal Revenue Service says the exception requires physical possession by a bank or an approved nonbank trustee, and that the rule applies even when an account-owned limited liability company buys the bullion (Internal Revenue Service). The Commodity Futures Trading Commission likewise says metals in a self-directed account must be held by the trustee or custodian (Commodity Futures Trading Commission). Our gold storage and insurance guide covers how depositories work.
Custodians can be stricter than the law
The Internal Revenue Service says trustees are permitted to impose additional restrictions on investments (Internal Revenue Service). A custodian may refuse a product the statute would allow. Always ask for the custodian's written list of accepted products before you buy.
Watch the "numismatic" pitch
The Commodity Futures Trading Commission explains that bullion coins share a common investment-grade purity and weight, that "numismatic" means rare or collectible, and that "semi-numismatic" is "a made-up industry term that really has no special meaning." It warns that fraudsters may use these labels to justify inflated spreads, and that only certain bullion can be kept in a self-directed account (Commodity Futures Trading Commission). Rare or proof-condition pricing is not what the coin exception is about; the statute names coins by specification, not by rarity. See gold spot price versus premium for how to measure what you are paying above melt value.
A quick checklist
- Is the product a coin named in section 408(m)(3)(A), or a state-issued coin?
- If not, does the seller document a fineness at or above the exchange minimum for that metal?
- Will it be held by a bank or an approved nonbank trustee, never at home?
- Does your custodian's written product list include it?
- What is the markup over melt value, and what is the buy-back price? See gold IRA fees explained.
Frequently asked questions
Does the Internal Revenue Service publish a list of approved coins?
Not as a product list. The rule is the statute: the coins named in section 408(m)(3)(A) plus bullion meeting the fineness and possession tests. Products are "approved" only in the sense that they fit those rules or a custodian accepts them.
Why can a coin that is about 91.7% gold qualify when a 99% pure bar cannot?
Because the qualifying United States gold coins are named in the statute by their specifications, while bars must meet the futures fineness minimum, which for gold is 995.
Are silver coins eligible?
The one-ounce .999 fine silver coin described in 31 U.S. Code § 5112(e) is on the coin list. Other silver bullion must be at least 999 fine and held by a trustee.
Can I hold rare or graded coins?
The coin exception names coins by specification, not rarity, and other coins are collectibles unless they meet the bullion test. Ask a qualified tax professional before buying anything sold on rarity.
Sources
All accessed October 26, 2026.
- Cornell Law School Legal Information Institute, 26 U.S. Code § 408, subsection (m).
- Cornell Law School Legal Information Institute, 31 U.S. Code § 5112.
- Internal Revenue Service, Publication 590-A, Contributions to Individual Retirement Arrangements.
- Internal Revenue Service, Retirement plans frequently asked questions regarding individual retirement arrangements.
- Internal Revenue Service, Investments in collectibles in individually directed qualified plan accounts (page last reviewed July 3, 2026).
- CME Group, COMEX Rulebook Chapter 113, Gold Futures, COMEX Rulebook Chapter 112, Silver Futures, NYMEX Rulebook Chapter 105, Platinum Futures and NYMEX Rulebook Chapter 106, Palladium Futures.
- Commodity Futures Trading Commission and Financial Industry Regulatory Authority, 10 Things to Ask Before Buying Physical Gold, Silver, or Other Metals (issued March 20, 2024).
Education, not investment, tax or legal advice. Product rules depend on the statute, the exchanges and your custodian; confirm any specific coin or bar with your custodian and a qualified tax professional before buying.
Not financial advice. This guide explains what the law says in general terms. It is not investment, tax or legal advice, and it does not recommend any product. Custodians can be stricter than the law, and some products sit in grey areas; confirm any specific coin or bar with your custodian and a qualified tax professional before you buy. Read the disclaimer.