American Gold Eagle in an IRA: Specs and Eligibility

The American Gold Eagle is the U.S. Mint's gold bullion coin. It confuses many savers because it is not "pure" gold, yet the Mint says savers can include it in an IRA. This page explains the specifications, the legal reason it fits, and what to ask before buying. It sits within our guide to IRA-eligible gold coins.

This page explains rules. It does not say whether any coin suits your retirement plan. That depends on your situation, so talk with a qualified financial adviser or tax professional.

What are the specifications of the American Gold Eagle?

The U.S. Mint says the coin uses a "22-karat standard." Its stated composition is 91.67% gold, 3% silver, and the balance copper (U.S. Mint). The coin comes in four sizes.

The face values come from the Mint's bullion page. The gold content and diameters come from 31 U.S.C. 5112(a), paragraphs (7) through (10), which say, for example, that the $50 coin "contains one troy ounce of fine gold" and is "32.7 millimeters in diameter" (31 U.S.C. 5112).

The Mint lists the total weight of the 1 oz coin as 1.0909 troy ounces (33.931 grams) and the 1/2 oz coin as 0.5455 troy ounces (16.966 grams). The coin weighs more than its gold content because the silver and copper add weight. By our arithmetic, 91.67% of 1.0909 troy ounces is about 1.000 troy ounce, which matches the statute's "one troy ounce of fine gold." That calculation is ours, not a Mint statement.

Why can an IRA hold a 22-karat coin?

Start with the general rule. The tax code treats "any metal or gem" and "any stamp or coin" as collectibles (26 U.S.C. 408(m)). If an IRA acquires a collectible, the purchase is treated as a distribution from the account. The IRS says the account owner "is deemed to receive a distribution" in the year of purchase, in the amount of the cost (IRS). Our collectibles rule guide explains the tax effect.

Two exceptions matter for gold:

1. The coin exception. Section 408(m)(3)(A) excludes certain gold coins from the definition of collectible. They are the gold coins described in paragraphs (7) through (10) of 31 U.S.C. 5112(a), the paragraphs quoted above.
2. The bullion exception. Section 408(m)(3)(B) excludes gold bullion that meets "the minimum fineness that a contract market requires for metals which may be delivered in satisfaction of a regulated futures contract." (This is our paraphrase of a long clause.)

The Gold Eagle fits the first route, not the second. Here is why we read it that way, and this is our interpretation, not an IRS statement:

• The coin exception points to a section that describes coins by their fine gold content and size. It does not set a purity percentage. A coin that matches the description in 5112(a) falls within the exception whatever its alloy.
• The bullion exception does use a purity test. The NYMEX gold futures rule says gold "shall assay to a minimum of 995 fineness" (CME Group). A 22-karat coin is 91.67% gold, which is a fineness of about .9167, below .995. So the Gold Eagle could not use the bullion route, and it does not need to.

This is the short answer to the question many savers ask. Purity is the test for bars. For these coins, the test is whether the coin is the one the statute describes. Our guide to fineness and purity shows how the two routes differ.

The Mint's bullion page also says that "long-term savers can include American Eagles in their Individual Retirement Accounts (IRAs)." That statement comes from the Mint's gold and silver pages. It is a marketing description, not a tax ruling.

What else must be true for the coins to qualify?

The statute's custody condition is written about bullion: the bullion 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." We did not find a source that spells out how that condition applies to the coin exception, so we do not claim one way or the other. In practice, IRA metals are held for the account by a trustee or custodian, not by the owner. FINRA and the CFTC say that "Metals in an SDIRA must be held by the IRA trustee or custodian" (FINRA and CFTC).

Three practical points follow:

• Personal possession has been litigated. Our guide to McNulty v. Commissioner covers a Tax Court case about IRA-purchased coins kept in personal possession.
• The custodian decides what it holds. A coin can fit the tax exception and still be refused by a custodian or depository. Ask which Eagle sizes and years they accept.
• Exact product matters. The Mint also sells collector versions. For the open questions about proof versions, see our guide to proof coins. For products that look similar but fail the tests, see coins that are not IRA eligible.

What about premiums?

A bullion coin is sold above the metal value of its gold content. FINRA and the CFTC warn that dealer spreads can be large and that some fraudulent dealers have charged spreads of more than 300 percent (FINRA and CFTC). That warning is about fraud, not about the typical Eagle premium. We did not open a source that states the typical premium on Gold Eagles, so we do not give a number.

What you can do is compare quotes for the same product:

• Ask for the buy price and the buyback price for the exact size and year, in writing.
• Compare each quote with the spot price on the same day.
• Ask whether the quote includes shipping, insurance and any custodian fee.
• Ask for the premium on each size separately, since each size is a different product. We did not find a source that compares premiums across sizes, so check it quote by quote.

Our coins vs bars guide compares the two formats, and our guide to bullion vs numismatic coins explains why collector coins are a different risk.

What are common mistakes?

• Treating "22-karat" as a sign the coin is not eligible. The statute describes the coin by fine gold content.
• Treating "IRA approved" in a sales pitch as a tax ruling. The tax rule applies to the account, and the custodian decides what it accepts.
• Buying a coin that looks like an Eagle but is a private-mint round or a collector version. Check the product name against the Mint's own program pages.
• Paying a premium without comparing it with the spot price and with other dealers.

Related questions

Is the American Gold Buffalo treated the same way? It is a separate coin with its own statute and purity. See our American Gold Buffalo guide.

Where do these rules fit in the whole account? Our Gold IRA overview shows the roles of custodian, dealer and depository.

Because the coin exception is a legal reading, this page is general information. A tax professional or attorney can tell you how it applies to your account.