A gold IRA is a self-directed individual retirement account that holds physical, IRS-qualifying gold or silver bullion in an insured depository through a custodian. Tax treatment is identical to any traditional or Roth IRA — what changes is the contents, the carrying costs (setup, custodian, storage, and the dealer’s spread), and the rule that you cannot store the metal at home.
A gold IRA is an ordinary IRA wearing different contents: instead of mutual funds, the account owns physical bullion, held for you by a custodian in an insured depository. The account type has existed since the Taxpayer Relief Act of 1997 expanded IRC § 408(m) to admit certain bullion. Tax treatment is the same as any traditional or Roth IRA, including the standard contribution limit (it was $7,000 in 2024, plus an age-50 catch-up; confirm the current year’s figure on irs.gov, and note that rollovers are uncapped) and required minimum distributions from age 73 for traditional accounts. What changes is what’s inside, what it costs to keep, and how much paperwork stands between you and a mistake. The full rulebook with citations is at Gold IRA Tax Rules.
The structure: three parties, not one
Every legitimate gold IRA involves:
- A custodian — the IRS-qualified trustee that administers the account.
- A depository — the insured, non-government vault that physically holds the metal.
- A dealer — the company that sells you the bullion (this is who the “free kit” ads come from).
The dealer is the only one of the three doing marketing, which is why choosing a dealer gets all the attention. But the law cares most about the custodian: metals must be held by a qualifying trustee, not by you.
What the IRS actually allows
The rule is 26 U.S.C. § 408(m)(3): Bullion escapes the IRA collectibles prohibition only if it meets a minimum fineness (gold 0.995, silver 0.999) and is held by a qualifying trustee — not by you personally. (statute text)
In practice that means fineness-qualified bullion. Common examples include the American Gold Eagle (allowed by a specific statutory carve-out despite its 22-karat purity) and the American Silver Eagle. It excludes collectible and numismatic coins, which is worth repeating because high-margin “rare coins” are the classic upsell in this industry. The complete product lists, eligible and not, are at IRA-Eligible Gold.
The home-storage myth
You will see ads for “home storage gold IRAs.” The U.S. Tax Court has already ruled on this fact pattern: in McNulty v. Commissioner, 157 T.C. No. 10 (U.S. Tax Court, 2021), Taking personal physical possession of IRA-owned metals — including ‘home storage’ via a checkbook LLC — was treated as a taxable distribution.
Translation: personal possession of IRA metal means the IRS treats that metal as distributed to you — taxable now, penalized if you’re under 59½. There’s no clever LLC structure around it that has survived scrutiny. If a company pitches one, that’s your cue to leave; see Gold IRA Red Flags.
What it costs
A gold IRA has carrying costs a brokerage IRA doesn’t:
- Setup fee (one-time) and annual custodian fee — charged by the custodian.
- Annual storage fee — charged for the depository vaulting.
- The dealer’s spread — the markup over spot price when you buy, and the markdown when you sell. This is the least visible and usually the largest cost. Always ask for it in writing.
The full cost map — all five buckets, typical industry ranges, and how to screen a fee schedule — is at Gold IRA Fees & Costs. Specific numbers vary by company; our Best Gold IRA Companies comparison marks what’s verified and what’s merely reported. The custodian side of the cost, and who the major custodians are, is covered separately in Gold IRA Custodians, and the purchase mechanics from funding to vault are in How to Buy Gold in an IRA.
Pros and cons
The case for: physical metal can’t go to zero the way a single stock can, sits outside the banking system, and has historically attracted buyers during inflation and crisis periods. For some savers, a slice of it genuinely reduces anxiety, and anxiety causes bad selling.
The case against: gold pays no interest or dividends, its price is volatile over the horizons retirees actually live through, fees and spreads compound against you, and the sector’s marketing runs on fear. Anyone promising that gold “always protects” is selling, not educating.
Neither side cancels the other out. The right allocation, if any, is a conversation with a licensed fiduciary, not a checkout button.
Where to go from here
- Moving an old employer plan? The mechanics: 401(k) to Gold IRA Rollover.
- Comparing companies? Start with fit by rollover size: Best Gold IRA Companies.
- Curious about silver, platinum, or palladium too? The umbrella account is the same one: What Is a Precious Metals IRA?.
- One specific question? The quick answers live at Gold IRA FAQ.
- Want to get educated before any salesperson? Grab our starter checklist (eligibility rules, costs to ask about, red flags to walk away from):
Frequently asked questions
What is a gold IRA in one sentence?
A self-directed individual retirement account that holds physical, IRS-qualifying gold or silver bullion in an insured depository through a custodian, instead of stocks and funds.
What gold can go in an IRA?
Bullion meeting the fineness floor in 26 U.S.C. § 408(m)(3) — 0.995 for gold, 0.999 for silver — held by a qualifying trustee. American Gold and Silver Eagles are the standard examples. Collectible and numismatic coins do not qualify.
Can I keep the gold at home?
Not without tax consequences. The U.S. Tax Court held in McNulty v. Commissioner (2021) that taking personal possession of IRA metals is a taxable distribution, even through a ‘checkbook LLC’ structure.
How much of a portfolio should be in gold?
There’s no universal number, and we won’t invent one. Advisers who use metals at all generally treat them as a modest diversification slice, not a core holding — gold pays no yield and its price is volatile. The allocation question belongs with a licensed fiduciary who can see your whole picture.