Collectors know the difference between proof and uncirculated coins. Now investors in numismatic Individual Retirement Accounts have to take that distinction seriously. According to the Industry Council for Tangible Assets, proof Buffalo gold coins should not be be included in IRAs. This advice is based on an ICTA conversation with someone in the Employee Plans Technical Group of the Internal Revenue Service.
Both the proof and uncirculated Buffalo gold pieces meet the fineness and metal content requirements of the 1997 Taxpayer Relief Act, but the act refers to allowable coins as being "bullion." The U.S. Mint Web site refers to the uncirculated version as a bullion coin but the proof version as a collector coin.
On such seemingly minor distinctions huge tax implications apparently hinge. Because ICTA did not seek a private letter ruling, the question is still open, but ICTA believes its interpretation is a word to the wise.
The only collector coins currently elibible for inclusion in IRAs are those from the American Eagle series that began in 1986. These were specifically authorized in the original legislation that created them.
Check the ICTA Web site at www.ictaonline.org for more information.
