Coins as an IRA

Pghpete

Oh wise ones, once again I seek your wisdom. When the Roth IRAs came out several years ago, I started one. This meant my traditional IRA stopped getting deposits and is now moving up and down with the market, currently with about $15k in it. I've been reading about coin-based IRAs and am thinking about moving the money from the traditional IRA into one of those. I have a 401k from work, an am fully funding my Roth IRA, so I wouldn't mind putting that $15k to work in the area of coins. I know I need to do a lot of research to get the "right" coins for the right price, with the best chance of appreciating in value. As to the coins, I'm thinking low-mintage, highly graded coins such as Morgan CCs, Lincoln 09S-VDB, 09 Indian Head penny, 19th century gold pieces etc. Any others? Naturally, they would have to be certified. As to getting a fair price, should the grey sheet be my reference source? Finally, has anyone had any dealings with these companies who offer these coin-based IRAs? They try to push bullion, but if I go with gold, I'd like to have a numismatic value to it rather than just the gold content. Many questions, long topic, but your opinions would be appreciated as usual.

ziggy29

My understanding is that the only coins that can be in an IRA are strictly bullion coins. Coins with numismatic value are not permitted in an IRA. And after the Ohio fiasco and considering all the current "coins as investments" hype out there, maybe that's a good thing.

Pghpete

Ziggy - and others,

You are absolutely correct. As much research as I did over the weekend, all I would've had to do was to check which types of coins are eligible for an IRA.

Please, disregard my initial post. Sorry 'bout that.

FoundingFather

I don't like this idea as it puts YOUR personal and private assets, like bullion and coins, onto the radar screen of Government for either future regulation, taxation, control, or confiscation. I think you are better off just owning coins privately -- you will get all the benefit and probably more options. Are you maxed on your 401K at work? Consider doing that. I would consider tangible assets if you desire to diversify -- like real estate or commodity/tangible asset based stuff.

solid

While you can't use your IRA to directly purchase collectible coins, I believe it
might be possible to set up a corporation that purchases the coins and use
your IRA funds to purchase shares in the corporation.

Of course, this would necessitate a fair amount of paperwork and funds just
to keep the corporation going, which would come out of any profits realized
by selling the coins.

Ken

jom

Solid is correct. BUT...if you engage in a business that has an IRA that owns the business that business will probably be subject to Unrelated Business Income Tax (UBIT). This is in place because such businesses would have an unfair tax advantage. The taxes on those things are VERY high. I'd suggest not to bother.

jom

PerryHall

<< <i>While you can't use your IRA to directly purchase collectible coins, I believe it
might be possible to set up a corporation that purchases the coins and use
your IRA funds to purchase shares in the corporation.

Of course, this would necessitate a fair amount of paperwork and funds just
to keep the corporation going, which would come out of any profits realized
by selling the coins.

Ken >>



I think something similar to this was reciently tried in Ohio.