Selling Metals Inside a Gold IRA: Buybacks and Liquidation

Selling metal is the step many owners think about least when they open an account. This page explains the mechanics: what a buyback is, what price to expect it to be based on, and how a sale inside the account differs from a withdrawal. It is the detailed companion to the Gold IRA Withdrawal Rules overview.

How do I sell the gold in my IRA?

Your metal sits in an IRA, so you do not sell it the way you would sell coins from a drawer. FINRA says: "Metals in an SDIRA must be held by the IRA trustee or custodian" (FINRA). FINRA uses SDIRA for "self-directed individual retirement accounts"; in plain terms, that is an IRA where you choose the investments. We did not find a formal regulator definition. Because the custodian holds the metal for the account, our inference is that a sale goes through the custodian. Confirm the process with yours.

The exact steps are set by your custodian's account agreement and forms, so we don't describe one fixed process. In general, expect these pieces:

1. A sale instruction. You tell the custodian, in the way it requires, what you want to sell and how much.
2. A buyer and a price. A dealer quotes the price it will pay. Ask who the buyer is and whether you can get quotes from more than one.
3. Proceeds. The money from a sale is paid to the IRA. What happens next depends on whether you leave it there or request a withdrawal.

Questions to put to your custodian before you ever need to sell:

• What is the written process for a sale, and what forms are needed?
• Who finds the buyer? Can I choose a buyer or get competing quotes?
• Are there custodian fees for a sale, for a withdrawal, or for both?
• How long do sales usually take from instruction to cash in the account? Ask for it in writing.

What is a buyback, and what is a bid price?

In plain-language terms (ours, not a regulator definition), a buyback is a dealer agreeing to purchase metal from you. The price it offers is commonly called its bid. The price it asks when it sells the same item is its ask, or selling price. FINRA describes the same gap as the dealer's "buy and sell price" difference, below.

The regulators describe how the two relate to the spot price. FINRA describes it this way: "This is the cash price for immediate delivery of physical metal" (FINRA). FINRA also says: "A dealer will always sell metal above the spot price and buy it back below the spot price." It also says: "The difference between the dealer's buy and sell price is known as the dealer's spread." The CFTC puts it this way: "Dealers will always charge more than the current spot price when you buy, and pay less than the spot price when you sell precious metals back" (CFTC).

For the buying side, see dealer premiums, markups and spreads.

How big is the gap between the bid and the spot price?

We found no regulator source for a typical figure, so we don't give one. The CFTC describes the dealer's buy-sell spread in general, not the bid-to-spot gap, saying it "can range anywhere from 30 to 300 percent or more" (CFTC). Another CFTC page says: "Some fraudulent dealers have charged spreads of more than 300 percent while others dealers may charge less than 20 percent" (CFTC). These are warnings about how wide the range can be, not forecasts of what you will see. FINRA adds a point about the extreme end: "If the spread is too high, as in most frauds, it's impossible for buyers ever to profit."

Because the bid is what you actually receive, the number to compare is the bid for your specific coin or bar, not a general statement about spot. Our guide to buyback spreads covers how to estimate the cost.

A simple illustration

The numbers below are made up to show the arithmetic. They are not typical figures and do not describe any company.

Now suppose the same coins were bought at a price above spot. The bid is measured against spot, not against what you paid, so the round trip loses both the original premium and the buyback gap. That is why the first question is always "What would you pay me for this item today?" Both regulators raise it. FINRA says: "Ask how much you would receive if you had to sell back the metal tomorrow" (FINRA). The CFTC's Ten Things page asks: "What's the dealer's buy-back price?" (CFTC).

Is a sale inside the IRA taxable?

The IRS says: "Generally, amounts in your traditional IRA (including earnings and gains) are not taxed until you take a distribution (withdrawal) from your IRA" (IRS). On that basis, if the custodian sells metal and the cash stays in the IRA, the sale is not a distribution, and the gain is not taxed at the time of the sale. We are describing how the IRS statement applies here. Check with a tax professional on your own facts.

Tax comes when money leaves the IRA:

• Traditional IRA. Publication 590-B says: "Distributions from a traditional IRA are taxed as ordinary income, but if you made nondeductible contributions, not all of the distribution is taxable" (IRS).
• Roth IRA. We did not open a source on how a sale inside a Roth IRA is treated. On withdrawals, the IRS says "If you satisfy the requirements, qualified distributions are tax-free" (IRS). The page sends readers to Publication 590-B for the requirements.
• Before 59½. The IRS says you can take distributions "at any time," but a distribution is "includible in your taxable income and it may be subject to a 10% additional tax if you're under age 59 1/2" (IRS). See the withdrawal rules for the exceptions.

Withholding can apply when a distribution is paid to you. The IRS page we opened uses the general term "IRA distribution" and does not say whether it differs by account type. It says: "An IRA distribution paid to you is subject to 10% withholding unless you elect out of withholding or choose to have a different amount withheld" (IRS).

Selling inside the IRA or taking a withdrawal: what is the difference?

Two different things can both start with a sale. Keep them apart.

If you would rather take the metal than the cash, that is a different route with its own rules. See taking physical possession of your metals.

How long does it take to sell Gold IRA metals?

We found no regulator or IRS source that gives a standard timeline, so we don't state one. Timing depends on your custodian's process, the buyer's process, and how the proceeds are paid. Ask for the steps and the expected time for each, and ask whether quotes are good for a set period. Because markets can move while a sale is pending, ask when the price is fixed: when you give the instruction, or when the sale completes.

What mistakes should I avoid when selling?

• Never asking about the bid before buying. FINRA and the CFTC both list the buyback price among the questions to ask first. The CFTC also advises getting "all fees, costs, commissions, and agreed retail price in writing" before signing (CFTC).
• Treating spot as the price you get. Spot is a reference. Your cash comes from the bid.
• Selling a coin without a quote for that coin. Different items can have different bids.
• Confusing a sale with a withdrawal. A sale that keeps cash in the IRA is not the same as paying yourself.
• Waiting until a deadline. If you need cash for a required minimum distribution, ask your custodian how it handles that request. See Gold IRA required minimum distributions.
• Skipping fees. Ask your custodian for its fee schedule for sales and distributions. We don't state amounts, since they vary by provider.

What related questions should I ask next?

• Can I get cash without selling everything? Whether a partial sale is possible depends on the custodian; ask. See the withdrawal rules.
• What if I have a required minimum distribution? We did not confirm in an IRS source whether or how a sale can be used to meet it, so ask your custodian and a tax professional. See required minimum distributions.
• What does the exit cost overall? Combine the bid, any custodian fees and any tax. See buyback spreads.
• Can I sell for more than spot? FINRA says a dealer will "always sell metal above the spot price and buy it back below the spot price." Ask for the bid in writing.

Where can I get advice?

This page is general education, not tax, legal or investment advice. A CPA or enrolled agent can explain how a sale or withdrawal affects your tax return. An attorney can help with questions about your account agreement. Your custodian can tell you its own process, fees and timing.