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February 19, 2009

Collectibles

Your Guide

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Definition

For purposes of retirement plan investments, a collectible is defined as follows:

  1. any work of art,
  2. any rug or antique
  3. any metal or gem,
  4. any stamp or coin,
  5. any alcoholic beverage, or
  6. any other tangible personal property specified by the Secretary for purposes of this subsection

A retirement plan  can invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department. It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion.

Referring Cite

IRC § 408(m) , IRS Publication 590

Additional Helpful Information

Generally, any amount invested in a collectible is treated as a distribution from the plan for the year of  the investment. The 10% early distribution penalty may apply to the amount.

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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Annual Benefit Limit

Definition The annual benefit limit for defined benefit plans is the lesser of: A) 100% of the participant’s average compensation for his or her highest

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