Solo 401(k) and Precious Metals: Rules and Storage

A solo 401(k) is a 401(k) plan for a business owner with no employees other than a spouse. Because many solo plans let the owner direct investments, people ask whether they can hold physical gold or silver, as in a Gold IRA. This page explains what the IRS and the tax code say, and where the answer is unclear. It is part of our Gold IRA overview and our guide to gold in a 401(k).

Professional review is needed. The law can apply differently to qualified plans than to IRAs. This page states interpretations, with sources, and does not give legal conclusions. Talk with a tax or benefits attorney before acting. This page does not say whether a solo 401(k) suits you.

What is a solo 401(k)?

The IRS calls it a one-participant 401(k) plan and says it is "sometimes called" a Solo 401(k), Solo-k, Uni-k or One-participant k. It is a traditional 401(k) for a business owner with no employees, and it can include the owner's spouse. The IRS says it "isn't a new type of 401(k) plan" and has "the same rules and requirements as any other 401(k) plan" (IRS). The page adds that a one-participant plan generally must file Form 5500-EZ if it has "$250,000 or more in assets" at year-end.

Does the collectibles rule apply to a solo 401(k)?

Yes, as best we can tell, if the account is individually directed. The IRS collectibles page covers "an individually-directed account under an IRC Section 401(a) qualified plan." It says, "A plan participant whose account acquires a collectible is deemed to receive a distribution" in the year of acquisition. It also says that "The restrictions applicable to collectibles also apply to IRAs" (IRS).

The statute says the same thing in more formal terms. Section 408(m)(1) treats the acquisition of a collectible by an IRA, or by an individually directed account under a section 401(a) plan, as a distribution of the cost (26 U.S.C. 408(m)).

A solo 401(k) is a 401(k) plan, and 401(k) plans are generally qualified plans under section 401(a). The IRS one-participant page does not mention section 401(a) by name, so this connection is our interpretation, not an IRS statement. It is still the reason the collectibles rule is relevant to a solo plan.

A broader IRS FAQ makes the general point: "participant-directed accounts and IRAs cannot invest in collectibles, such as art, antiques, gems, coins," but "they can invest in certain precious metals only if they meet specific requirements." The FAQ says that "there is no list of approved investments for retirement plans" (IRS FAQ). It does not mention solo 401(k) plans by name.

Which metals qualify?

The same exceptions that apply to an IRA are written into section 408(m)(3). Certain coins are excluded from "collectible," including gold coins described in paragraphs (7) through (10) of 31 U.S.C. 5112(a), silver coins under 5112(e), platinum coins under 5112(k) and state-issued coins. Gold, silver, platinum or palladium bullion is excluded if it meets the minimum fineness a regulated futures market requires for deliverable metal (26 U.S.C. 408(m)). Our guides to IRA-eligible precious metals and fineness and purity go through the products.

The last row of the table is our general description, not a source quote. The IRS FAQ says there is "no list of approved investments for retirement plans," so a plan's own terms matter. We did not find a source listing which solo 401(k) providers allow metals.

What about trustee custody and storage?

This is the main open question.

For bullion, the statute says the exclusion applies only if the bullion is "in the physical possession of a trustee described under subsection (a)" of section 408. The IRS says the bullion exception applies "if a bank or approved non-bank trustee keeps physical possession of it." The IRS page on qualified plan accounts uses this wording, and the statute ties it to a trustee described in section 408(a). Subsection (a) of section 408 describes the IRA trustee as a bank or another person who "demonstrates to the satisfaction of the Secretary" that it will administer the trust consistently with the section.

We did not find a source that explains how this condition applies when the plan's trustee is the business owner, as it often is in a solo plan. We therefore make no statement about whether home storage, a safe-deposit box or a depository fits. The risk is stated plainly by the IRS: a collectible acquired by the account is treated as a distribution of its cost. An attorney who works with qualified plans can tell you how the custody condition applies to your plan. Our storage guide explains how depositories work for IRAs.

How is this different from a Gold IRA?

• Same collectibles rule. Both are covered by section 408(m).
• Different set-up. A solo 401(k) is a plan with its own plan document. A Gold IRA is an IRA with a custodian.
• Filing. The IRS says a one-participant plan generally must file Form 5500-EZ at $250,000 or more in assets. Our Gold IRA reporting guide covers IRA forms.
• Brokerage accounts. See our brokerage IRA gold guide for what major brokerages offer.

What are common mistakes?

• Assuming that a solo 401(k) is exempt from the collectibles rule because it is a business plan.
• Buying coins or bars that do not meet the exceptions. See our guide to coins that are not IRA eligible.
• Not asking an attorney how the custody condition applies to metal kept outside a depository. The IRS says an acquired collectible is deemed a distribution.
• Relying on a label rather than the rules. The IRS says there is "no list of approved investments for retirement plans."

Related questions

Can I roll a 401(k) into a Gold IRA instead? See our 401(k) to Gold IRA guide.

What did the Tax Court say about personal possession? See our McNulty v. Commissioner guide. That case involved an IRA, not a solo 401(k).

This page is general information. An attorney or tax professional should review your plan documents before you buy metals.