Are Collectibles Allowed in an IRA?

Art is an exciting asset class with high returns; however, Self-Directed IRA investors should avoid investing in collectibles due to IRS restrictions. This includes non-fungible tokens (NFTs), which serve as unique digital identifiers representing assets or rights.

Investment in restricted assets violates IRS rules and can lead to harsh penalties, so here are five types of collectibles your IRA should avoid:


Art and other collectible items can be difficult to manage and track, and the IRS has established rules prohibiting your retirement account from investing in them due to their subjective valuation that could impute value back onto it, violating the exclusive benefit rule.

IRS officials have taken notice of nonfungible tokens (NFTs). Marketed as an opportunity for diversified investment portfolios, NFTs may become collectibles under tax law and would no longer be eligible to be purchased in self-directed IRAs. There are however exceptions; your IRA can purchase one-half and quarter ounce gold bullion meeting purity standards or certain alcoholic beverages such as wine and single malt whiskeys.

Rugs or Antiques

Self-Directed IRAs cannot directly invest in collectibles like artwork, antiques, rugs, metals, gems, stamps and coins as they fall outside IRS guidelines for investment in collectibles; however they are permitted to invest in specific forms of bullion such as gold and silver that meets certain metallurgical specifications.

Family Classic Cars of Southern California is currently recruiting investors with retirement accounts to own a fractional interest in classic automobiles such as a 1953 Bugatti Royale Coupe and 1955 Mercedes-Benz 300SL, potentially in violation of IRC 4975 plan asset rules and other elements. This transaction may constitute prohibited conduct.

IRAs cannot generally lend or borrow from anyone disqualified (including family members). An exception exists if the loan meets certain conditions, including being secured by assets of equal value and meeting incidental business purposes.

Metals or Gems

Precious metals are another investment option popular with self-directed IRA investors, although there are specific rules set by the IRS regarding purchases and storage in precious metals IRAs.

IRS rules generally restrict any purchase of collectible items into an IRA except a select few bullion items, including artwork, rugs, antiques, gems stamps coins and alcohol beverages such as fine wine.

An Individual Retirement Account (IRA) allows owners to invest only in bullion products approved by the Internal Revenue Service. To qualify, these must be in brilliant uncirculated condition without damage. In addition, owners can choose segregated storage options at certain depository services so their precious metals do not mix with those belonging to other customers.

Stamps or Coins

The IRS prohibits collectingibles such as works of art, rugs or antiques; metals or gems; stamps or coins from being placed into individual retirement accounts (IRAs). An exception exists for certain gold coins which meet purity standards.

Self-Directed IRAs cannot lend money directly to themselves or disqualified people (like family members). This practice is known as prohibited transactions.

Stamps cannot be owned in an IRA because their acquisition would constitute a distribution from your account, and would be taxed as ordinary income and subject to the 10% early withdrawal penalty if you are under age 59.5. However, you could invest in funds which own collections of stamps or coins which do not violate plan asset rules.

Alcoholic Beverages

IRS rules generally forbid Individual Retirement Accounts from investing in collectibles like artwork, rugs or antiques as well as metals or gems (for instance stamps and coins), alcoholic beverages and collectible coins; with limited exceptions: US and foreign gold bullion coins with 99.9% purity can also be invested in and certain alcoholic beverages can also be invested in.

A southern California company has advertised a limited partnership that will enable Individual Retirement Accounts (IRAs) to invest in collector cars. While it remains unclear whether this transaction would constitute prohibited transactions, it appears as if your IRA won’t directly own them; rather, they would own shares in a partnership which owns them instead.

Any illegal transactions within an IRA can incur substantial penalties. When investing in prohibited collectibles, for instance, this amount will be distributed back to the account as soon as they have been purchased.

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