However, the IRS considers physical quantities of metal to be “collectibles.” For collectibles, such as coins, works of art and ingots, the standard tax rate is 28%. As a result, owning physical gold or owning funds that in turn hold physical gold means you can pay a higher maximum capital gains rate of 28%. You may have better luck investing your IRA in an exchange-traded fund that records the value of gold rather than real metal. The federal government prohibits you from investing your IRA funds in collectibles, but gold is an exception.
Investors often perceive the high costs of owning gold as profit margins and storage fees for physical gold, or management fees and trading costs of gold funds. If you buy and sell gold as an investment, you usually have to pay taxes on short-term or long-term capital gains, depending on whether you owned the gold for more than a year. A 1031 bag allows you to postpone your tax bill by reinvesting the money from your gold sale in more gold. If you die before you sell and your heirs inherit the gold, your cost base will be the fair market value of the gold on the date of your death.
As long as you don't buy or sell to family members or entities you own, the gold you buy and sell comes in certain forms and you don't take physical possession of the gold, you can keep it in a self-directed IRA, SIMPLE, 401k or SEP IRA account.