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U.S. Master™ Pension Guide, 2009 Edition
Revised for 2009 to include relevant provisions of the Heroes Earnings Assistance Relief Tax (HEART) Act and the Emergency Economic Stabilization Act.

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CCH® PENSION AND BENEFITS — 10/9/07

Shares in trusts holding gold and silver bullion were not “collectibles” for IRA purposes

The acquisition by an IRA of shares in trusts which hold gold and silver bullion as their only asset will not constitute the acquisition of a collectible under Code Sec. 408(m) , the IRS has privately ruled. The trusts were formed to permit investors to gain investment exposure in the gold and silver markets without the inconvenience and cost of purchasing physical gold and silver directly.

Code Sec. 408(m) provides that the acquisition of any collectible by an IRA will be treated as a distribution in an amount equal to the cost of the collectible. Under Code Sec. 408(m)(3), investment-grade gold and silver bullion is excluded from the definition of “collectible” so long as it is in the physical possession of a trustee. The IRS noted that, in the event of a redemption of shares that resulted in a distribution of the bullion, the distribution would constitute an acquisition of a collectible, absent compliance with Code Sec. 408(m)(3).

For more information on this and related topics, consult the CCH Pension Plan Guide.

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