IRS Purity Standards for Precious Metals in IRAs
For an IRA to hold precious metals without the purchase being treated as a taxable distribution, the metal generally must be bullion at or above a minimum fineness: .995 for gold, .999 for silver, and .9995 for platinum and palladium. Certain coins, most notably the American Eagle series, qualify by name in the statute regardless of fineness. Both rules come from Internal Revenue Code section 408(m)(3).
Where the Numbers Come From
The tax code does not print ".995" anywhere. Section 408(m)(3)(B) instead allows "gold, silver, platinum, or palladium bullion" of a fineness equal to or exceeding the minimum that a contract market requires for metals delivered against a regulated futures contract, as long as the bullion is in the physical possession of the IRA trustee. Contract markets are the futures exchanges regulated under the Commodity Exchange Act, such as the exchanges operated by CME Group. Their delivery specifications set the fineness figures that custodians and dealers now use as the working standard.
The full statute is available from Cornell's Legal Information Institute. Because the rule sits inside the collectibles provision, it helps to understand that context too; see the collectibles rule and precious metals.
Minimum Fineness by Metal
| Metal | Minimum fineness | Expressed as purity | Example that meets it |
|---|---|---|---|
| Gold | .995 | 99.5% | Canadian Gold Maple Leaf (.9999) |
| Silver | .999 | 99.9% | Austrian Silver Philharmonic (.999) |
| Platinum | .9995 | 99.95% | Platinum Maple Leaf (.9995) |
| Palladium | .9995 | 99.95% | Palladium Maple Leaf (.9995) |
Fineness is measured in parts per thousand of pure metal. A .995 gold bar is 99.5% gold by weight. Karats express the same idea on a 24-part scale, so 24-karat gold is roughly .999 or higher, and 22-karat gold is about .9167. Our page on gold purity, fineness, and karats explains the conversions.
The American Eagle Coin Exception
Section 408(m)(3)(A) separately lists certain coins that are not treated as collectibles:
- Gold coins described in paragraphs (7) through (10) of 31 U.S.C. 5112(a), which are the 1, ½, ¼, and 1/10 ounce American Gold Eagles
- Silver coins described in 31 U.S.C. 5112(e), the American Silver Eagle
- Platinum coins described in 31 U.S.C. 5112(k), the American Platinum Eagle
- Coins issued under the laws of any U.S. state
This is why the American Gold Eagle is IRA eligible even though it is 22-karat, about .9167 fine, and below the .995 bullion line. Each 1-ounce Gold Eagle still contains one troy ounce of pure gold; the alloy of silver and copper adds durability and weight. See our American Gold Eagle coin guide for its specifications.
The exception is narrow. It does not extend to other countries' 22-karat coins, which is why the South African Krugerrand, also about .9167 fine, generally does not qualify.
Fineness Alone Is Not the Whole Test
Meeting a purity number is necessary but not always sufficient. Custodians apply additional practical checks:
- Bullion character: the product should trade on its metal content. Coins sold mainly for rarity, grade, or collector appeal can draw scrutiny even when the metal is pure enough.
- Recognized manufacturer: bars generally need to come from a national mint or an accredited refiner, with a stamped fineness, weight, and usually a serial number. Our page on IRA-eligible gold and silver bars covers accreditation.
- Condition: damaged or altered pieces may be refused.
- Trustee possession: the statute's bullion exception requires the trustee to hold the metal, which in practice means an approved depository.
Common Misunderstandings
"Any 24-karat gold qualifies"
Pure gold jewelry, artisan pieces, or bars from unknown makers can meet the number and still be refused, because the custodian cannot readily verify them or value them as bullion.
"Older versions of a coin are the same as new ones"
Some coins changed composition. The British gold and silver Britannias, for example, were struck at lower fineness before the Royal Mint raised them to current standards, so older dates may not meet the test. Check the year.
"Proof coins are automatically excluded"
Proof American Eagles fall within the statutory coin exception. They usually cost far more per ounce of metal, though, so the question is often about value rather than eligibility.
How to Verify a Specific Product
- Look up the mint's or refiner's published fineness for that product and year.
- Ask the custodian whether it is on its accepted list.
- Get the product name, year, and fineness written on your invoice.
Lists of common qualifying products are on our pages for IRA-eligible gold coins and IRA-eligible silver coins. If you are buying through a precious metals company, you can also ask it to confirm eligibility in writing; our page on gold coins available through Goldco shows what that company lists. This page is general information, not tax advice.
Frequently Asked Questions
Do gold rounds from private mints meet the purity rule?
Many are .999 or .9999 gold, but custodians decide whether to accept them. Ask before buying.
Is the American Gold Buffalo covered by the coin exception?
It is not one of the coins listed in the exception, but at .9999 fine it qualifies as bullion.
What happens if a non-qualifying coin is bought by mistake?
The cost can be treated as a distribution, which may be taxable. Contact the custodian promptly and consult a tax professional.