American Gold Buffalo in an IRA

The American Gold Buffalo is the U.S. Mint's 24-karat gold bullion coin. Unlike the 22-karat Eagle, its legal route into an IRA is probably the purity test, not the coin list. This page explains why, using the statute, the Mint and the futures-market rulebook. For the other U.S. gold coin, see our American Gold Eagle guide, and for the full list see IRA-eligible gold coins.

Professional review is advised. The reading below is our interpretation of statutes, with sources. It is not a legal conclusion. This page does not say whether any coin suits your retirement plan.

What are the specifications of the American Gold Buffalo?

The U.S. Mint lists the American Buffalo gold bullion coin this way (U.S. Mint):

The Mint says the coin's "content and purity is guaranteed by the U.S. Government." The Buffalo bullion coin is described by statute in a different place from the Eagle. Section 5112(q) of Title 31 directs the Secretary to strike "$50 gold bullion and proof coins" and says the coins' initial designs "shall bear the original designs by James Earle Fraser, which appear on the 5-cent coin." Section 5112(a)(11) describes a $50 gold coin that "weighs 1 ounce, and contains 99.99 percent pure gold" (31 U.S.C. 5112). We did not find language in the section that expressly ties paragraph (a)(11) to the coins struck under subsection (q), so we read them together as our interpretation only.

How does the collectibles rule apply?

The tax code treats "any metal or gem" and "any stamp or coin" as collectibles (26 U.S.C. 408(m)). The IRS says a plan participant whose account acquires a collectible "is deemed to receive a distribution" in the year of acquisition (IRS); the statute treats the cost as the amount distributed. See our collectibles rule guide.

Two exceptions matter for gold:

1. Coin exception. Section 408(m)(3)(A) names gold coins described in paragraphs (7), (8), (9) and (10) of 31 U.S.C. 5112(a). Those are the $50, $25, $10 and $5 coins described by fine gold content (one troy ounce, one-half, one-fourth and one-tenth).
2. Bullion exception. Section 408(m)(3)(B) excludes gold, silver, platinum or palladium bullion that meets the minimum fineness a contract market requires for metals deliverable against a regulated futures contract, if a trustee has physical possession of it.

The Buffalo's description sits in paragraph (a)(11) and subsection (q), not in paragraphs (7) through (10). As we read the statute, that means the Buffalo is not one of the coins named in the coin exception. This is the opposite of the Eagle's position, and it is our interpretation.

Why can the Buffalo still fit the bullion exception?

The NYMEX gold rule says gold "shall assay to a minimum of 995 fineness" (CME Group). That is .995. The Buffalo is .9999 fine, which is higher. So on purity, the Buffalo clears the bar that the bullion exception points to.

Whether a legal-tender coin counts as "bullion" under the statute is a legal reading, and we did not find IRS guidance that names the Buffalo. The IRS page summarizes the bullion exception as "Any gold, silver, platinum, or palladium bullion of a certain fineness" and says it applies "if a bank or approved non-bank trustee keeps physical possession of it." A tax attorney can tell you how the exception applies to a coin. The Mint's page has no IRA sentence for the Buffalo; the only IRA sentence on that page appears in the Eagle section. We therefore do not say the Mint "approves" the Buffalo for IRAs.

Eagle vs Buffalo at a glance

What should you check before buying?

• Custodian and depository acceptance. The custodian decides what it holds. Ask whether it accepts the Buffalo in the sizes you want.
• Custody. Bullion must be in the physical possession of a trustee, per the statute. FINRA and the CFTC say "Metals in an SDIRA must be held by the IRA trustee or custodian" (FINRA and CFTC).
• Exact product. Match the product name and year to the Mint's pages. Collector versions are different products; see proof coins.
• Total cost. FINRA and the CFTC warn that dealer spreads can be large and that some fraudulent dealers charged spreads above 300 percent. Compare quotes with the spot price.

What are common mistakes?

• Assuming the Buffalo and the Eagle qualify the same way. They are described differently in the statute.
• Treating a seller's "IRA approved" claim as a tax ruling.
• Skipping a written buyback quote.

Related questions

How do coins compare with bars? See coins vs bars. What about fineness numbers? See fineness and purity.

This page is general information. A tax professional or attorney can confirm how the exceptions apply to a specific coin.