Start with the part that surprises most metals buyers: under IRC §408(m)(2), "any metal or gem" and "any stamp or coin" are collectibles. A retirement account that buys a collectible is treated as having made a distribution equal to the purchase price. Every legal gold IRA in America exists because of the carve-out in §408(m)(3) — and that carve-out has two separate doors.
Understanding which door your metal walks through has been an IRA technicality for forty years. A pair of bills now in committee would borrow one of those doors and point it at mutual funds and ETFs — and the two versions don't agree on how.
The Two Doors
Door A — §408(m)(3)(A): named coins, no fineness test. Gold coins described in 31 U.S.C. §5112(a)(7)–(10), silver coins under §5112(e), platinum coins under §5112(k), and any coin issued under the laws of any State. Eligibility here is about statutory authorization, not purity.
Door B — §408(m)(3)(B): bullion that meets a market standard. Gold, silver, platinum, or palladium bullion "of a fineness equal to or exceeding the minimum fineness that a contract market... requires for metals which may be delivered in satisfaction of a regulated futures contract" — provided the bullion sits in the physical possession of an approved trustee. Note that the statute never names a number. It points at the exchanges. The COMEX gold contract currently requires a minimum assay of 995 fineness; silver, platinum and palladium standards run tighter still.
Here is why the distinction bites. The American Gold Eagle is struck in 22-karat crown gold — .9167 fine. It fails Door B's .995 outright. It is IRA-eligible only because Congress named it in Door A.
What the Bills Actually Say
Both bills are called the Precious Metals Parity Act, and both amend §851(b)(2)(A) — the rule requiring a regulated investment company (RIC) to draw at least 90% of gross income from dividends, interest, securities-lending payments, and gains from stock, securities, or foreign currencies. Gains on physical metal aren't on that list. That single omission is why metal-backed vehicles are structured as grantor trusts rather than mutual funds, and why "precious metals" mutual funds hold miners instead of metal.
- S. 989 (Sen. Cortez Masto, with Sens. Risch, Lummis, and — since May 12, 2026 — Lee), introduced March 12, 2025, referred to Finance. It inserts "precious metals" into the qualifying-income list and stops there. No definition.
- H.R. 9060 (Rep. Hern, with Reps. Horsford and Moran), introduced May 29, 2026, referred to Ways and Means. It makes the same insertion and adds a definition: precious metals means "any gold, silver, platinum, or palladium bullion described in section 408(m)(3)(B)."
The House bill picks Door B and leaves Door A behind. Read literally, income from American Gold Eagles would not be qualifying income for a mutual fund — even though the identical coin is unambiguously eligible for your IRA. Whether a coin can ever be "bullion" under Door B is itself unsettled drafting: the statute treats coins and bullion as separate prongs, so even a .999 Silver Eagle sits in a gray zone. The Senate bill creates the opposite problem — an undefined term left to Treasury.
What These Bills Do Not Do
They do not change IRA eligibility rules. They do not touch the 28% maximum federal rate on net collectibles gains in taxable accounts. And neither has moved: for both bills, the latest recorded action is still the original committee referral.
Practical Takeaways
- Know which door your metal uses. If a dealer cites "IRS-approved" purity, ask whether the coin qualifies under Door A (named coin) or Door B (fineness). Gold Eagles only clear Door A.
- Door B's threshold can move without Congress. It tracks exchange delivery standards, not a number in the tax code. A contract-market change could shift eligibility.
- Don't let a bill number become a sales pitch. Pending legislation referred to committee in 2025 and 2026 with no further action is not an imminent change. Be skeptical of any pitch implying otherwise.
- This is why your 401(k) menu has no metal fund. Plan menus are built from RICs. Until metal gains count as qualifying income, direct-metal funds generally can't be structured as mutual funds — a real constraint on in-plan metals exposure, and worth knowing before assuming a 401(k) can replicate what an IRA holds.
- Watch for divergence, not just passage. If this advances, the operative question is which chamber's definition survives.
Sources: 26 U.S.C. §408(m) and §851(b)(2) (govinfo, USCODE-2023-title26); introduced text of S. 989 and H.R. 9060, 119th Congress (govinfo); govinfo BILLSTATUS XML for both bills (sponsors, introduction dates, latest action); CME Group Gold Futures and Options fact card (995 minimum assay); U.S. Mint American Gold Eagle specifications (.9167 fine); IRS Topic No. 409 (28% maximum collectibles rate); Retirement Industry Trust Association, "IRA-Eligible Precious Metals: Why Section 408(m)(3) Now Matters Beyond IRAs."