Do I pay capital gains tax on gold inside my IRA?

No. Capital gains are not separately taxed inside any IRA. In a Traditional IRA, all distributions are taxed as ordinary income. In a Roth IRA, qualified distributions are entirely tax-free. The 28 percent collectibles capital gains rate only applies to precious metals held outside an IRA.

Is a Roth IRA better than a Traditional IRA for gold and silver?

For many investors, yes. Because physical precious metals face a higher capital gains rate (28 percent) when held outside tax-advantaged accounts, the Roth IRA's completely tax-free qualified distributions provide the greatest benefit. However, the Traditional IRA's upfront tax deduction may be more valuable if you are in a high bracket now and expect to be in a lower bracket in retirement.

What are the 2026 IRA contribution limits?

The IRS announces contribution limits annually, adjusted for inflation. Check the IRS website or consult a tax professional for the exact 2026 figures. The limits apply to the total of all your Traditional and Roth IRA contributions combined.

Can I contribute to both a Traditional and Roth precious metals IRA?

Yes, but the combined total cannot exceed the annual contribution limit. For example, if the limit is $7,000 and you contribute $4,000 to a Traditional IRA, you can contribute at most $3,000 to a Roth IRA that same year.

What tax do I pay on an in-kind distribution of physical gold?

The tax treatment is identical to a cash distribution. For a Traditional IRA, the fair market value of the metals on the distribution date is taxed as ordinary income. For a qualified Roth distribution, no tax is owed. See our distributions guide for full details on in-kind distributions.

What happens if I over-contribute to my IRA?

Excess contributions are subject to a 6 percent penalty for each year they remain in the account. To correct an excess contribution, withdraw it (plus any attributable earnings) before the tax filing deadline for that year. The earnings withdrawn are subject to income tax and potentially the early withdrawal penalty.

Are precious metals IRA fees tax-deductible?

IRA administrative fees paid from personal funds (outside the IRA) may be deductible as investment expenses in certain situations. However, recent tax law changes have limited miscellaneous itemized deductions. Consult a tax professional for current guidance specific to your situation.

How does a precious metals IRA rollover affect my taxes?

A direct (trustee-to-trustee) rollover from a 401(k) or existing IRA to a precious metals IRA is not a taxable event. An indirect rollover—where you receive the funds and redeposit within 60 days—is also not taxable if completed on time, but carries risk. A Roth conversion (Traditional to Roth) is a taxable event. Our rollover guide and 401(k) to gold IRA guide cover the mechanics.

Precious Metals IRA Tax Rules: Traditional, Roth and Contribution Limits

The tax rules governing a precious metals IRA are among the most important—and most misunderstood—aspects of holding physical gold and silver in a retirement account. A clear understanding of how contributions are treated, how growth is taxed, what happens at distribution and how much you can contribute each year is essential for maximizing the tax advantages of your account and avoiding costly mistakes. This guide covers the complete tax landscape for both Traditional and Roth precious metals IRAs, including 2026 contribution limits, deductibility rules, capital gains treatment, distribution taxation, early withdrawal penalties, state tax considerations and reporting requirements.

Traditional Precious Metals IRA Tax Treatment

A Traditional precious metals IRA follows the same basic tax rules as any Traditional IRA—the distinguishing feature is that the assets happen to be physical gold, silver, platinum or palladium rather than stocks and bonds.

Contributions: Tax-Deductible (With Limitations)

Contributions to a Traditional IRA may be fully or partially tax-deductible depending on your income, filing status and whether you (or your spouse) are covered by an employer-sponsored retirement plan.

No employer plan coverage: Your full contribution is deductible regardless of income.
Covered by an employer plan: The deduction phases out above certain income thresholds. For 2026, the phase-out ranges are adjusted annually by the IRS for inflation. Check the IRS website or consult a tax professional for the current year's exact figures.
Spouse covered by employer plan (but you are not): A higher phase-out range applies, allowing deduction at higher income levels.

Even if your contribution is not deductible, you can still make a non-deductible Traditional IRA contribution. The contribution itself will not be taxed again upon distribution (since it was made with after-tax dollars), but any growth in the account is taxed as ordinary income when distributed.

Growth: Tax-Deferred

All appreciation in the value of your metals—whether from rising gold prices, increasing silver demand or any other market factor—grows tax-deferred inside a Traditional IRA. You owe no tax on gains until you take a distribution. This is one of the primary advantages of holding metals in an IRA rather than in a personal, non-retirement account.

Distributions: Taxed as Ordinary Income

When you take a distribution from a Traditional precious metals IRA—whether in cash or as physical metal (in-kind)—the full distribution amount is taxed as ordinary income at your marginal tax rate. This applies regardless of how long the metals were held in the account and regardless of whether the metals appreciated or depreciated.

Important note: precious metals held outside an IRA are classified as collectibles for tax purposes and are subject to a maximum long-term capital gains rate of 28 percent. Inside a Traditional IRA, this distinction is irrelevant because distributions are taxed as ordinary income, not capital gains. Depending on your tax bracket, this could be higher or lower than the 28 percent collectibles rate.

Roth Precious Metals IRA Tax Treatment

A Roth precious metals IRA offers a fundamentally different—and for many investors, more advantageous—tax structure.

Contributions: Not Tax-Deductible

Roth IRA contributions are made with after-tax dollars. You receive no tax deduction in the year you contribute. However, this upfront cost buys you significant benefits on the back end.

Growth: Tax-Free

All appreciation inside a Roth IRA grows completely tax-free—not tax-deferred, but tax-free. If gold in your Roth IRA doubles in value over 20 years, that entire gain is never taxed, provided you take a qualified distribution.

Qualified Distributions: Tax-Free

A Roth IRA distribution is qualified (and therefore entirely tax-free) if two conditions are met:

The Roth IRA has been open for at least five tax years (the five-year rule).
You are age 59½ or older, disabled, or using up to $10,000 for a first-time home purchase.

When both conditions are met, your entire distribution—contributions plus all growth—is tax-free. This makes a Roth IRA particularly powerful for precious metals, where significant long-term appreciation is possible.

Non-Qualified Distributions

If you take a distribution before meeting the five-year rule and age 59½ requirement, the earnings portion of the distribution is subject to income tax and potentially the 10 percent early withdrawal penalty. However, Roth contributions (the amounts you put in) can always be withdrawn tax-free and penalty-free because they were made with after-tax dollars.

2026 Contribution Limits

IRA contribution limits are set annually by the IRS and adjusted for inflation. For 2026, the limits are expected to be in line with recent years' trajectory. The following figures should be verified against the latest IRS announcements:

Under age 50: The standard annual contribution limit applies to the total of all your IRA contributions (Traditional and Roth combined).
Age 50 and older: An additional catch-up contribution is allowed on top of the standard limit.

Important: These limits apply to the total of all your IRA contributions across all accounts. If you contribute to both a Traditional IRA and a Roth IRA, the combined amount cannot exceed the annual limit. Excess contributions are subject to a 6 percent penalty for each year they remain in the account.

Roth IRA Income Limits

Unlike Traditional IRAs (where anyone with earned income can contribute, though deductibility may be limited), Roth IRA contributions are subject to income phase-out thresholds. Above certain modified adjusted gross income levels, your ability to contribute to a Roth IRA is reduced and eventually eliminated. High-income earners who exceed these limits may consider a 'backdoor Roth' strategy—contributing to a non-deductible Traditional IRA and then converting to a Roth—though this carries its own tax complexities.

Capital Gains Treatment Inside an IRA

One of the most important tax distinctions for precious metals investors is how gains are treated inside vs. outside an IRA:

Outside an IRA: Physical gold and silver are classified as collectibles. Long-term capital gains (held more than one year) are taxed at a maximum rate of 28 percent—higher than the 15-20 percent rate that applies to stocks and most other investments. Short-term gains are taxed as ordinary income.
Inside a Traditional IRA: There is no separate capital gains tax. All distributions are taxed as ordinary income regardless of holding period. Depending on your bracket, this could be more or less favorable than the 28 percent collectibles rate.
Inside a Roth IRA: Qualified distributions are entirely tax-free. This is the most favorable treatment possible for precious metals, as you avoid both the 28 percent collectibles rate and ordinary income tax entirely.

This capital gains advantage is a key reason many financial strategists recommend holding precious metals in a Roth IRA when possible. The metals that would face the harshest tax treatment outside the IRA receive the most favorable treatment inside a Roth.

Early Withdrawal Penalties

Taking a distribution before age 59½ generally triggers a 10 percent early withdrawal penalty on the taxable portion of the distribution. This penalty applies in addition to any income tax owed:

Traditional IRA: The full distribution is subject to income tax and the 10 percent penalty (unless an exception applies).
Roth IRA: Contributions can always be withdrawn tax- and penalty-free. Only the earnings portion is subject to tax and penalty if withdrawn early without qualification.

Exceptions to the early withdrawal penalty include disability, substantially equal periodic payments (72(t)), certain medical expenses, first-time home purchase (up to $10,000) and others. Our distributions guide lists all exceptions in detail.

Roth Conversions: A Strategic Opportunity

If you hold precious metals in a Traditional IRA, you can convert some or all of the account to a Roth IRA. The converted amount is taxed as ordinary income in the year of conversion, but all future growth and qualified distributions will be tax-free.

Roth conversions are particularly strategic in years when your income (and therefore your tax bracket) is lower than usual—for example, between retirement and the start of Social Security benefits, or during a year of reduced earnings. Converting during a period when gold or silver prices are temporarily depressed also reduces the tax cost, as you are converting a lower dollar value.

State Tax Considerations

Federal tax rules are only part of the picture. State tax treatment of IRA distributions and precious metals varies significantly:

No state income tax: States like Texas, Florida, Nevada, Wyoming, Alaska, South Dakota, Washington and Tennessee do not tax IRA distributions (or any other income).
Retirement income exemptions: Some states offer partial or full exemptions for retirement income, including IRA distributions, up to certain limits.
Full taxation: Other states tax IRA distributions at their standard income tax rates, which can add several percentage points to your effective tax burden.
Sales tax on metals: Many states exempt investment-grade gold and silver from sales tax, but some do not. For IRA purchases that ship directly to a depository, sales tax typically does not apply.

If you are nearing retirement, your state of residence at the time of distribution will determine your state tax liability. This is worth considering in retirement planning, as relocating to a tax-friendly state before taking large distributions or RMDs can produce meaningful savings.

Reporting Requirements

Your IRA custodian handles most tax reporting, but you should understand what gets filed:

Form 5498 – Filed by your custodian reporting your IRA contributions, rollovers, conversions and fair market value for the year. You receive a copy for your records.
Form 1099-R – Filed by your custodian when you take a distribution. Reports the distribution amount, taxable amount and any tax withheld.
Form 8606 – You file this with your tax return if you make non-deductible Traditional IRA contributions or take distributions from an IRA that contains both deductible and non-deductible contributions.
Schedule D / Form 8949 – Not used for IRA distributions, but relevant if you sell precious metals held outside an IRA.

Maintain your own records of contributions, rollovers, conversions and distributions to cross-reference against custodian-issued tax forms. Our IRA mistakes guide highlights common reporting errors that can trigger IRS notices.

Frequently Asked Questions

Do I pay capital gains tax on gold inside my IRA?: No. Capital gains are not separately taxed inside any IRA. In a Traditional IRA, all distributions are taxed as ordinary income. In a Roth IRA, qualified distributions are entirely tax-free. The 28 percent collectibles capital gains rate only applies to precious metals held outside an IRA.
Is a Roth IRA better than a Traditional IRA for gold and silver?: For many investors, yes. Because physical precious metals face a higher capital gains rate (28 percent) when held outside tax-advantaged accounts, the Roth IRA's completely tax-free qualified distributions provide the greatest benefit. However, the Traditional IRA's upfront tax deduction may be more valuable if you are in a high bracket now and expect to be in a lower bracket in retirement.
What are the 2026 IRA contribution limits?: The IRS announces contribution limits annually, adjusted for inflation. Check the IRS website or consult a tax professional for the exact 2026 figures. The limits apply to the total of all your Traditional and Roth IRA contributions combined.
Can I contribute to both a Traditional and Roth precious metals IRA?: Yes, but the combined total cannot exceed the annual contribution limit. For example, if the limit is $7,000 and you contribute $4,000 to a Traditional IRA, you can contribute at most $3,000 to a Roth IRA that same year.
What tax do I pay on an in-kind distribution of physical gold?: The tax treatment is identical to a cash distribution. For a Traditional IRA, the fair market value of the metals on the distribution date is taxed as ordinary income. For a qualified Roth distribution, no tax is owed. See our distributions guide for full details on in-kind distributions.
What happens if I over-contribute to my IRA?: Excess contributions are subject to a 6 percent penalty for each year they remain in the account. To correct an excess contribution, withdraw it (plus any attributable earnings) before the tax filing deadline for that year. The earnings withdrawn are subject to income tax and potentially the early withdrawal penalty.
Are precious metals IRA fees tax-deductible?: IRA administrative fees paid from personal funds (outside the IRA) may be deductible as investment expenses in certain situations. However, recent tax law changes have limited miscellaneous itemized deductions. Consult a tax professional for current guidance specific to your situation.
How does a precious metals IRA rollover affect my taxes?: A direct (trustee-to-trustee) rollover from a 401(k) or existing IRA to a precious metals IRA is not a taxable event. An indirect rollover—where you receive the funds and redeposit within 60 days—is also not taxable if completed on time, but carries risk. A Roth conversion (Traditional to Roth) is a taxable event. Our rollover guide and 401(k) to gold IRA guide cover the mechanics.

Maximize Your Tax Advantages With the Right Strategy

Understanding the tax rules is what separates a well-optimized precious metals IRA from an expensive mistake. Whether you choose a Traditional IRA for upfront deductions or a Roth IRA for tax-free growth and distributions, the key is aligning your choice with your current income, expected future tax bracket and retirement timeline. Explore MintBuilder's gold products and silver products for IRA-eligible metals, and pair your selection with the custodian and strategy that maximize your after-tax returns. For a complete walkthrough of the setup process, start with our comprehensive gold IRA guide, and review our fee breakdown to plan your total cost of ownership.