Many investors ask us if they can hold proof American Eagle coins in their IRAs. The short answer is “yes.” However, it is a good idea to be familiar with the relationship between proofs and IRAs. A “proof” American Eagle is unusual because it is considered both a collectible, which is categorically disallowed by the IRS, and a bullion product, which is allowed by the IRS. Let’s look at these two characterizations.
American Eagle coins are commonly known as a bullion product. This type of coin makes it convenient for a consumer to buy a relatively small amount of gold, silver or platinum. The U.S. Mint also produces “proof” American Eagle coins and it’s common for an investor or a collector to note that the price of “proof” coins is different from regularly minted coins. But why is that and what does proof mean?
The U.S. Mint outlines the difference between proof and regularly minted coins in their description of the proof American Eagles on their website, usmint.gov: “The United States Mint produces proof versions of American Eagle Bullion coins for collectors. American Eagle Proof Coins undergo a specialized minting process, which begins by manually feeding burnished coin blanks into presses fitted with special dies. The coin is struck multiple times so the softly frosted, yet detailed images seem to float above a mirror-like field. After scrutiny by white gloved inspectors, each American Eagle Gold and Silver Proof Coin is sealed in a protective plastic capsule … with its own official Certificate of Authenticity. ... Since American Eagle Proof Coins are produced by the United States Mint, each coin's content, weight and purity are guaranteed by the United States Government.
The IRS allows physical precious metals (gold, silver, platinum and palladium) to be held as assets in a self-directed IRA. There are fineness requirements associated with these metals, and the basic idea is that the IRA is purchasing a bullion product. In this way, the value is determined by the market price of that amount of that metal. In other words, it is the raw, intrinsic value of the material that is being purchased. This is important because the IRS broadly prohibits the purchase of collectibles to be assets of an IRA.
Although silver and gold American Eagle Proof Coins are collectible and the gold eagle doesn’t meet the fineness requirement set forth by the IRS, these coins are available to your IRA. Eagles are allowable for IRAs by virtue of a specific exception within IRS code.
Furthermore, the idea that proofs are collectibles may be a gray area about which the IRS eventually provides clarification, but for now, American Eagles remain an allowable bullion product with some traits that typically apply to collectibles.