Gold IRA Glossary

Gold IRA

A self-directed individual retirement account that holds physical gold (and sometimes other approved precious metals) instead of paper assets like stocks or bonds. Subject to the same contribution limits and tax rules as traditional IRAs.

Custodian

A financial institution — typically a bank, credit union, or trust company — approved by the IRS to hold IRA assets on your behalf. Gold IRA custodians handle paperwork, reporting, and compliance; they do not store the physical metal.

Depository

A secure, IRS-approved storage facility where your physical gold is held. Common depositories include Delaware Depository and Brink's. The IRS requires that Gold IRA metals be stored at an approved depository, not at home.

Rollover

The process of moving funds from one retirement account (such as a 401(k) or traditional IRA) into a Gold IRA. A direct rollover transfers funds between custodians without you touching the money; an indirect rollover gives you 60 days to redeposit the funds.

Self-Directed IRA

An IRA where the account holder chooses the investments rather than being limited to a brokerage's menu of stocks, bonds, and mutual funds. Gold IRAs are a type of self-directed IRA that permits physical precious metals.

Required Minimum Distribution

The minimum amount the IRS requires you to withdraw from tax-deferred retirement accounts each year once you reach a certain age (currently 73). For Gold IRAs, this may require selling some metal to generate the cash distribution.

Spot Price

The current market price for one troy ounce of a precious metal, as quoted on commodity exchanges. Spot price changes throughout the trading day and serves as the baseline for what you pay — but you will always pay more than spot.

Premium

The amount a dealer charges above the spot price for a coin or bar. Premiums cover minting costs, dealer margins, and market demand. A lower premium means you are paying closer to the metal's melt value.

Segregated Storage

A storage arrangement where your metals are kept separate from other investors' holdings, typically in an individually labeled container. Segregated storage usually costs more but guarantees you receive the exact same coins or bars you purchased.

Commingled Storage

A storage arrangement where your metals are pooled together with other investors' holdings of the same type and purity. You own a specific quantity, but not specific individual pieces. Commingled storage is less expensive than segregated.

Allocated (Segregated) Storage

A depository arrangement where your specific coins and bars are stored separately from other investors' metals, individually labeled and tracked. Costs more than commingled storage but guarantees you receive your exact metals back.

Fineness

The purity of a precious metal, expressed as parts per thousand. The IRS requires minimum 0.995 fineness for gold in an IRA (except American Gold Eagles at 0.9167), 0.999 for silver, and 0.9995 for platinum and palladium.

Troy Ounce

The standard unit of measurement for precious metals, equal to 31.1035 grams — approximately 10% heavier than a standard avoirdupois ounce. When gold is quoted "per ounce," it means per troy ounce.

Form 5498

Form 5498 is the IRS information return that custodians file annually to report IRA contributions, rollovers, conversions, and the fair-market value of the account on December 31.

Form 1099-R

Form 1099-R is the IRS information return that custodians file when you take a distribution from your Gold IRA.

Form 5329

Form 5329 is the IRS form used to report additional taxes on qualified plans and IRAs, including the 6% excess contribution penalty, the 10% early-withdrawal penalty, and the 25% missed-RMD excise tax (reducible to 10% with timely correction under SECURE 2.0).

Form W-4R

Form W-4R is the IRS form used to elect federal income tax withholding on nonperiodic IRA distributions.

Modified Adjusted Gross Income (MAGI)

Modified Adjusted Gross Income (MAGI) is your Adjusted Gross Income (AGI) with certain deductions added back, used by the IRS to determine eligibility for tax benefits including IRA deductibility and Roth IRA contribution limits.

In-Kind Distribution

An in-kind distribution transfers the actual physical metal from your Gold IRA depository to you, rather than converting it to cash first.

Constructive Receipt

Constructive receipt is an IRS doctrine stating that you owe taxes on funds the moment you have unrestricted access to them, even if you have not physically received them.

Numismatic Coin

A numismatic coin is a coin valued primarily for its rarity, historical significance, or collector demand rather than its metal content.

Buyback Spread

The buyback spread is the difference between the spot price and the price a dealer offers when buying metals back from you, typically 1% to 5% below spot.

Beneficiary

A beneficiary is the person or entity designated to receive the assets of your Gold IRA upon your death.

Direct Rollover

A direct rollover transfers funds from one retirement account to another directly between custodians, without the funds passing through your hands.

Indirect Rollover

An indirect rollover sends retirement funds to you first, and you have 60 days to deposit the full amount into a new retirement account.

SEP IRA

A Simplified Employee Pension (SEP) IRA is a retirement plan for self-employed individuals and small-business owners.

SIMPLE IRA

A Savings Incentive Match Plan for Employees (SIMPLE) IRA is an employer-sponsored retirement plan for small businesses with 100 or fewer employees.

Dealer Markup

A dealer markup is the amount a precious metals dealer adds above the spot price when selling coins or bars.

60-Day Rule

The 60-day rule gives you 60 calendar days to redeposit retirement funds into another qualified account after receiving an indirect rollover distribution.