Precious Metals IRAs Face Custody Conundrum

A precious metals IRA holds physical gold or silver under the same tax rules as any other IRA. However, one condition overrides all others: a bank or an IRS-approved trustee must physically possess the metal.

According to the Internal Revenue Code Section 408(m)(3), a retirement account can hold gold, silver, platinum, or palladium bullion of a set fineness, but only if it is held by a qualified custodian. The rule applies even if the coins are eligible holdings.

In the case of McNulty v. Commissioner, a couple set up self-directed IRAs and stored American Eagle coins in their home safe. The court ruled that physical possession gave the owners unfettered control, resulting in a taxable distribution equal to the purchase price.

The IRS sets account limits at $7,500 for those under 50, and $8,600 for those 50 or older. In August 2026, GoldSilver's live gold price was around $4,500, and silver sat at high $60s.