Quick Answer
How custodians price your metals for IRS reporting
Your custodian reports the fair market value of your gold IRA as of December 31 on IRS Form 5498, Box 5. For gold bars, FMV is typically derived from a recognized spot price benchmark on the last business day of the year. For coins, most custodians apply a bid-based price that reflects dealer buy-side quotes rather than the trading spot price. Because IRS rules do not mandate a single pricing source, two custodians holding identical coins can report different FMV figures. That difference flows directly into your required minimum distribution calculation and the taxable amount on any Roth conversion.
What fair market value means inside an IRA
The IRS defines fair market value as the price at which property would change hands between a willing buyer and a willing seller, with neither under compulsion to buy or sell and both having reasonable knowledge of relevant facts. This definition comes from Treasury Regulation 1.170A-1(c)(2) and applies to IRA assets just as it applies to charitable contributions.
For a typical brokerage IRA holding stocks or mutual funds, FMV is straightforward: the published closing price on December 31. Physical gold held inside a self-directed IRA is different. There is no single national exchange publishing a continuous price for a specific one-ounce American Gold Eagle coin, and the spread between what a dealer will sell for (the ask) and what a dealer will buy for (the bid) can be meaningful.
The custodian makes a judgment call in applying the willing-buyer/willing-seller standard to physical metals. That judgment call is where methodologies diverge.
The December 31 snapshot
IRS Publication 590-A requires custodians and trustees to report the December 31 FMV of all IRA assets each year on Form 5498. The filing deadline for custodians is May 31 of the following year, but the value measured is always the year-end figure. Participants receive a copy of Form 5498 after year-end, which shows this number in Box 5.
When December 31 falls on a weekend or holiday, custodians typically use the last business day on which their pricing source published a value. The LBMA (London Bullion Market Association) publishes a morning and afternoon gold price fix on each London business day. The New York COMEX settlement price is another widely referenced benchmark. A custodian relying on the LBMA PM fix on December 30 versus one using the COMEX settlement on December 31 can arrive at slightly different numbers even before any bid adjustment.
If your account holds both gold and silver, or bars and coins in combination, the custodian prices each holding separately and sums the values to produce the single Box 5 figure on Form 5498.
FMV methodology for gold bars
Gold bars that meet IRS fineness standards (minimum .9950 purity for gold, per IRS Publication 590-B) are priced primarily on their metal content. A custodian valuing a 10-troy-ounce PAMP Suisse bar will multiply the bar’s stated troy-ounce weight by the spot gold price on the measurement date.
The key question is whether the custodian uses the spot price directly or applies a bid-side adjustment. Spot price represents the current market trading price for an immediate delivery contract. A bid-based valuation asks: what would a dealer actually pay for this bar today? For large-format investment bars from well-known refiners, the bid is typically very close to spot, with a spread that may be less than one percent.
A second consideration is refiner recognition. Bars from LBMA-listed good delivery refiners (Metalor, PAMP, Heraeus, and others on the official LBMA list) carry minimal recognition risk. Bars from less-recognized mints may trade at a wider bid-to-spot spread because a secondary-market buyer would need to assay the bar before purchase. A custodian accounting for that reality would apply a lower FMV to an obscure-refinery bar than to an equivalent-weight LBMA good delivery bar.
FMV methodology for gold coins
Coins are more complex. The IRS requires that gold coins in a self-directed IRA meet specific fineness standards. For example, American Gold Eagles must have a minimum .9167 fineness, while American Gold Buffalos must have .9999 fineness. Canadian Maple Leafs, Austrian Philharmonics, and South African Krugerrands each have their own fineness requirements under IRS Publication 590-B.
Because coins carry a manufacturing premium above raw melt value, their retail price (the ask) can run significantly above the value of the gold they contain. That premium reflects the coin’s weight, design, and government backing, but it does not reflect an amount a willing buyer would automatically pay in a secondary market. A custodian applying a rigorous willing-buyer/willing-seller standard therefore does not use the retail ask price as FMV.
Most custodians price coins at the wholesale bid, which is the price a dealer network would pay to buy the coin in bulk. Published wholesale bid sheets from major dealer networks provide a reference. Some custodians use a proprietary bid formula derived from the spot price plus a discount factor that varies by coin type and size.
A one-ounce American Gold Eagle, for example, carries a larger premium over spot than a one-ounce bar. But if a custodian prices it at the bid rather than the ask, the FMV reported to the IRS will be below both the retail price you paid and the current retail ask. This is not a valuation error. It reflects the market reality of what a willing buyer would pay a willing seller without dealer markup applied.
Why two custodians can report different values for identical coins
The IRS does not mandate that custodians use a single reference source for precious metals FMV. This means two custodians holding the same 10 one-ounce American Gold Eagles can lawfully report different Box 5 figures. Several factors explain the gap:
| Factor | Custodian A approach | Custodian B approach |
|---|---|---|
| Price benchmark | LBMA PM fix | COMEX settlement |
| Bid adjustment | None (spot price used directly) | Wholesale bid sheet applied |
| Measurement date | December 31 (prior closing) | Last LBMA business day before Dec 31 |
| Coin premium treatment | Flat percentage over spot included | Strictly melt-value bid |
Each of these approaches can be a reasonable application of the willing-buyer/willing-seller standard. The IRS does not audit FMV methodology for routine year-end valuations, but a custodian must be prepared to explain its approach if asked. You can request the custodian’s written valuation methodology statement, which reputable custodians will provide.
How FMV affects your required minimum distribution
Required minimum distributions for a traditional gold IRA are calculated using the December 31 account value from the prior year. According to IRS Publication 590-B, you divide that prior year-end FMV by the applicable life expectancy factor from the Uniform Lifetime Table (or Joint Life and Last Survivor Table if the sole beneficiary is a spouse more than 10 years younger).
A higher FMV produces a larger RMD. A lower FMV produces a smaller RMD. If your custodian values your coins at a conservative bid rather than spot, your RMD will be smaller. That means less forced liquidation of physical metals in the following year, which some account holders prefer during periods when they want to maintain their metals position.
The mechanics create a practical tension. To satisfy an RMD from a gold IRA, you must either sell enough metal to raise the required cash distribution or take an in-kind distribution of physical metal (which has its own complexity around depository transfer and personal storage rules). The FMV figure determines how much metal you need to move.
The table below shows a simplified illustration. The actual numbers will depend on your specific holdings, the gold price on December 31 of the prior year, and your age:
| Scenario | Year-end FMV | Life expectancy factor (age 73) | RMD amount |
|---|---|---|---|
| Spot-based FMV | $200,000 | 26.5 | $7,547 |
| Bid-based FMV (5% below spot) | $190,000 | 26.5 | $7,170 |
The life expectancy factor of 26.5 for a 73-year-old comes from the IRS Uniform Lifetime Table published in IRS Publication 590-B. Both FMV figures in this table are illustrative. Your custodian’s actual December 31 value will determine your real RMD.
How FMV affects a Roth conversion
A Roth conversion moves assets from a traditional IRA (pre-tax) to a Roth IRA (after-tax). The amount converted is included in your gross income for the year of the conversion. For physical gold, the taxable amount is the FMV of the metals on the date they move from the traditional IRA to the Roth IRA, as established by IRS Publication 590-A.
This means the methodology your custodian uses to establish FMV on the conversion date directly determines your tax bill. If your custodian values your American Gold Eagles at a wholesale bid that runs below the retail spot price, you convert a lower taxable dollar amount into your Roth. That is not a tax strategy in the aggressive sense; it is simply how the willing-buyer/willing-seller standard applies on a transaction-by-transaction basis.
The reverse is also true: if your custodian uses a retail ask-side price or includes a significant numismatic premium in the FMV calculation, your taxable conversion amount goes up. Ask your custodian in writing what price it uses to establish FMV for Roth conversion events, and whether that methodology differs from the year-end methodology it uses for Form 5498 reporting.
Timing also matters. If you convert in a month when spot gold is lower, the FMV at conversion is lower, and the taxable amount is smaller. Gold price volatility makes the conversion-date selection more meaningful than in a typical equity IRA where values fluctuate within narrower ranges. Consult a tax advisor before initiating any Roth conversion.
How to verify your year-end FMV figure
When your Form 5498 arrives, compare the Box 5 figure to what you can independently calculate. The steps:
- Obtain the LBMA gold price for the last business day of December (published at lbma.org.uk/prices). Note whether you are looking at the AM or PM fix.
- Identify the exact holdings in your account: bar weights by refiner and troy-ounce content, coin quantities by type.
- Calculate the spot-based value by multiplying each holding’s troy-ounce gold content by the LBMA price you found.
- If your custodian uses a bid adjustment, ask for the specific bid factors applied on December 31. Compare the result to Box 5.
- If the discrepancy is larger than a few percent and you cannot explain it through the bid adjustment, request a written explanation from the custodian. Errors in FMV reporting are correctable with an amended Form 5498.
A corrected Form 5498 can affect a prior-year RMD calculation if you took distributions based on the erroneous value. Work with a CPA familiar with self-directed IRAs to assess whether a correction is needed and whether any amended returns or penalty waiver requests are appropriate. The IRS procedures for RMD shortfalls are described in IRS Publication 590-B.
If you hold silver, platinum, or palladium alongside gold, the same verification logic applies to each metal using its respective LBMA benchmark (silver fix from LBMA, platinum and palladium prices from LBMA Platinum and Palladium Price).
For related guides, see our explanation of IRS Form 5498 for gold IRAs and our walkthrough of RMD computation worked examples for precious metals accounts.
Frequently asked questions
Does the IRS require custodians to use spot price for gold IRA FMV?
No. The IRS applies the willing-buyer/willing-seller standard defined in Treasury Regulation 1.170A-1(c)(2) without specifying a single pricing source. Custodians may use spot price, the LBMA fix, COMEX settlement, or wholesale bid prices as long as the methodology can be defended as a market-based willing-buyer/willing-seller price. The absence of a mandated source is the root cause of FMV differences between custodians holding identical metals.
When exactly does a custodian measure the December 31 FMV?
Most custodians use the close of the last business day in the calendar year on which their chosen pricing source publishes a value. If December 31 is a Saturday, Sunday, or holiday, the custodian typically uses December 30 or the most recent prior business day. Because the LBMA publishes prices on London business days and COMEX trades on US business days, the exact date can differ slightly between custodians, adding another source of variation.
Can my gold IRA custodian’s FMV be lower than what I paid for my metals?
Yes. The retail purchase price you paid includes a dealer markup (the “ask” price). If your custodian values your metals at the wholesale “bid” price for FMV purposes, the IRS-reported value may be below your purchase price, particularly soon after you buy. This is not a loss in the accounting sense; it simply reflects the difference between retail and wholesale pricing for physical metals. Over time, if gold prices rise, the FMV typically moves above your purchase price.
Does a lower FMV on Form 5498 save me money on taxes?
A lower December 31 FMV produces a smaller RMD in the following year, which means a smaller mandatory taxable distribution. For Roth conversions, a lower FMV on the conversion date means a smaller taxable amount added to your income in the year of conversion. However, a lower FMV also means that if you liquidate the account, you may have a higher capital gain to report when actual sale proceeds exceed the previously reported FMV basis. The tax effects are asymmetric and depend on your circumstances; a CPA should review your specific situation.
What should I do if Form 5498 shows a value that seems wrong?
First request the custodian’s written methodology for December 31 pricing. Compare their stated methodology to your independent calculation using the LBMA gold price published for that date. If after that comparison you believe there is an error, ask the custodian to file a corrected Form 5498 (designated with a check in the “Corrected” box). If the custodian refuses and you believe the original figure is inaccurate, a CPA or tax attorney can advise on your options, which may include contacting the IRS directly.
Does FMV methodology affect silver, platinum, and palladium in an IRA?
Yes. The same willing-buyer/willing-seller standard applies to all IRA-eligible precious metals. Silver, platinum, and palladium each have their own LBMA benchmark prices, and custodians apply the same spot-versus-bid question to each metal. Because silver is typically traded in larger quantities with smaller per-ounce values, the bid-to-spot spread for silver bars and coins can differ from the gold equivalent. Verify the methodology for each metal class separately when reviewing your Form 5498.
Sources
- IRS Publication 590-A, “Contributions to Individual Retirement Arrangements (IRAs)”: covers Form 5498 reporting requirements and Roth conversion rules. irs.gov/publications/p590a
- IRS Publication 590-B, “Distributions from Individual Retirement Arrangements (IRAs)”: covers RMD calculation methodology, Uniform Lifetime Table, and December 31 FMV as the RMD base. irs.gov/publications/p590b
- Treasury Regulation Section 1.170A-1(c)(2): defines fair market value as the willing-buyer/willing-seller standard applicable to property valuations for federal tax purposes.
- IRS Instructions for Forms 1099-R and 5498: specifies Box 5 FMV reporting requirements for IRA trustees and custodians. irs.gov/pub/irs-pdf/i1099r.pdf
- London Bullion Market Association (LBMA): publishes the daily gold price benchmark (AM and PM fix) referenced by custodians for precious metals valuation. lbma.org.uk/prices-and-data/precious-metal-prices
- IRS Revenue Procedure 2023-34: sets the required beginning date for RMDs at age 73 for individuals born between 1951 and 1959, and age 75 for those born in 1960 or later, consistent with SECURE 2.0 Act provisions. irs.gov/pub/irs-drop/rp-23-34.pdf