Gold IRA Tax Reporting for California Residents (1099-R, 5498, 3805P)

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Last updated: June 21, 2026 · By Gold California Editorial

This page covers the paperwork side of a California gold IRA distribution. It walks through every form your custodian, the IRS, and the Franchise Tax Board expect, in the order they appear in the reporting chain. Each figure traces to an IRS or California Franchise Tax Board source, cited inline.

Form 1099-R: how your custodian reports the distribution

Your gold IRA custodian reports every taxable distribution on Form 1099-R, titled Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. (source: IRS, About Form 1099-R). The custodian sends one copy to you and one copy to the IRS for each distribution year.

The numbers on Form 1099-R drive the rest of your tax return. Box 1 holds the gross distribution amount. Box 2a holds the taxable amount, often the same as Box 1 for a traditional gold IRA. Box 4 holds any federal income tax withheld, and Box 7 holds the distribution code that signals what kind of distribution it was.

An IRA distribution is also flagged with an "X" in the IRA/SEP/SIMPLE checkbox to the right of Box 7, per the IRS Instructions for Forms 1099-R and 5498. That single checkbox tells the IRS the money came out of an IRA rather than a pension or 401(k).

Form 1099-R Box 7 distribution codes that matter for a gold IRA

The Box 7 distribution code is the single most important field on Form 1099-R for a California gold IRA owner. It tells the IRS and the Franchise Tax Board whether your distribution was early, normal, a death payment, a disability payment, or a clean rollover. The code drives whether the 10% federal and 2.5% California additional taxes apply.

The IRS Instructions for Forms 1099-R and 5498 confirm the codes used most often by a gold IRA custodian. Code 1 marks an early distribution with no known exception. Code 2 marks an early distribution with an exception the custodian can verify. Code 3 means disability, code 4 means death, and code 7 means a normal distribution from a participant who has reached age 59 and a half.

Rollovers use a different code set. Code G appears on a direct rollover from one retirement plan to another. Code H appears on a direct rollover of a designated Roth account distribution to a Roth IRA. Both come from the IRS Instructions for Forms 1099-R and 5498. A direct rollover is not a taxable event, even though the dollar amount still appears on the form.

Sources: IRS Instructions for Forms 1099-R and 5498; California FTB Form 3805P 2025 instructions. Checked June 2026. Consult your tax advisor for your situation.

Form 5498: year-end value, contributions, and the RMD flag

Form 5498 is the annual statement the IRA custodian files with the IRS, titled IRA Contribution Information (source: IRS, About Form 5498). It is informational. The custodian files it, and you keep a copy for your records; you do not attach it to your federal or California return.

Box 5 of Form 5498 reports the fair market value of the account as of December 31. For a gold IRA, that value includes the metal at its fair market value on that date, calculated by the custodian or depository. The number anchors your account size and supports your required-minimum-distribution math.

Box 7 of Form 5498 carries account-type checkboxes for IRA, SEP, SIMPLE, Roth IRA, Roth SEP IRA, and Roth SIMPLE IRA. Box 11 marks the account if a required minimum distribution is due in the coming year. Other boxes report contributions, rollovers in, conversions, and recharacterizations.

You see Form 5498 even in years you do not take a distribution. A gold IRA custodian is required to file it every year the account is open and to send you the copy by the May filing deadline. Keep the form with your tax records.

In-kind metal, fair market value, and Form 1099-R

An in-kind metal distribution is still a distribution, and it still shows on Form 1099-R. The taxable amount in Box 2a is the fair market value of the coins or bars on the day they leave the IRA (source: IRS Publication 590-B). The custodian sets that value from a published quote on the distribution day.

The metal does not escape tax because it never converted to cash. The same Box 7 distribution code rules apply, and the same federal and California reporting flow follows. If you are under 59.5 with no exception, the 12.5% combined early tax applies to that fair market value too.

Form 5498 also captures metal value, on the year-end side. The Box 5 fair market value of your gold IRA on December 31 includes the metal at its market price that day. That figure feeds your required minimum distribution calculation the following year if you are at or past the RMD start age.

Federal Form 5329 and Schedule 2 for the 10% additional tax

Form 5329 is the federal companion to FTB Form 3805P. Its full title is Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts (source: IRS, About Form 5329). It computes the 10% federal additional tax on an early distribution.

You do not always have to file Form 5329. Per IRS Topic 557, if Box 7 of your 1099-R shows code 1 and no federal exception applies, the 10% can be reported on Schedule 2 of Form 1040 with a box checked. Form 5329 itself is then skipped. Form 5329 is required when you claim a federal exception that the custodian did not code on the 1099-R.

The result of the 10% federal calculation flows to Schedule 2 either way, and from there to Form 1040. The 10% is stacked on top of the regular federal ordinary income tax on the distribution, not used in place of it.

Schedule CA (540): carrying the income to California

Schedule CA (540) is the California adjustment schedule that carries federal income items into California adjusted gross income, with state-specific additions and subtractions (source: FTB Publication 1005). It is the bridge between your federal return and your California 540.

For a gold IRA distribution, the federally taxable amount from Form 1099-R flows into Schedule CA (540) Part I, Section B, generally on the IRA-distribution line. From there it lands in California adjusted gross income and is taxed at California ordinary income rates, which reach 13.3% combined at the very top. The metal in the account changes nothing about this flow.

Part-year residents and nonresidents use Schedule CA (540NR) instead. Distributions received while a California resident enter California adjusted gross income; distributions received after a clean change of residency to another state are generally outside California tax under 4 U.S. Code Section 114.

FTB Form 3805P: the California 2.5% additional tax

FTB Form 3805P is titled Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts. It is the California state-tax cousin of federal Form 5329. The instructions confirm the trigger to file (source: California FTB, 2025 Form 3805P instructions).

You file Form 3805P if you received an early taxable distribution and Box 7 of your 1099-R shows a distribution code other than 2, 3, or 4. The exact FTB wording places the federal 1099-R distribution code at the heart of the California filing requirement. The Form 3805P number-crunching happens on lines 1 to 4 of the form.

Line 4 of Form 3805P multiplies the taxable early-distribution amount by 2.5%. The form sets a different rate for one narrow case. A SIMPLE IRA distribution received within 2 years of first participating in the plan is multiplied by 6%, identified by Box 7 code S on the 1099-R (source: California FTB Form 3805P 2025 instructions).

Joint filers each complete their own Form 3805P. The FTB instructions are explicit on this point: each spouse or registered domestic partner files a separate Form 3805P for the early distributions attributable to that person. If both owe, you add the two results together on the California return.

Sources: IRS About Form 1099-R, About Form 5498, About Form 5329, Publication 590-B; California FTB Publication 1005 and Form 3805P 2025 instructions. Checked June 2026.

Where the Form 3805P result lands on your California return

The result on Line 4 of Form 3805P does not stay on Form 3805P. You carry it onto your California return. The FTB instructions are explicit (source: California FTB, 2025 Form 3805P instructions).

If you are a California resident filing Form 540, the result is included in the total on Form 540 line 63. If you are a nonresident or part-year resident filing Form 540NR, it goes on Form 540NR line 73. Attach your completed Form 3805P to your return.

This is where the 2.5% California additional tax actually shows up on your state tax bill. It is not added to your ordinary income; it is reported as a separate additional tax line. The 2.5% sits on top of the ordinary California income tax already computed on the distribution amount that flowed in through Schedule CA (540).

How rollovers and trustee-to-trustee transfers appear on the forms

A direct rollover is not a taxable event, but it still shows up on Form 1099-R. The custodian reports it with Box 7 code G (or code H for a designated Roth rollover to a Roth IRA) per the IRS Instructions for Forms 1099-R and 5498. The dollar amount appears in Box 1, and Box 2a typically shows zero taxable.

An indirect rollover, where the distribution check comes to you and you have 60 days to redeposit, looks like an early or normal distribution on Form 1099-R, with Box 7 code 1 or code 7. You report the rollover treatment on your federal return by claiming the indirect-rollover treatment on Form 1040.

A trustee-to-trustee transfer between two IRAs of the same type is different again. The Form 5498 from the receiving custodian reports it as a rollover in. A direct trustee-to-trustee transfer generally does not generate a 1099-R, because it is treated as a non-reportable movement of assets between custodians.

How to report a gold IRA distribution on your California return

The steps below outline how a California resident reports a gold IRA distribution across the federal and state forms. They describe the mechanics; they are not tax advice, and your tax professional handles the specifics.

1. Collect your Form 1099-R from your custodian. Confirm the gross amount in Box 1, the taxable amount in Box 2a, and the distribution code in Box 7. Keep your Form 5498 for records.
2. Report the federal taxable amount on Form 1040. Enter the taxable amount as ordinary income. This is the figure that flows to California through Schedule CA (540).
3. Figure any federal early tax on Form 5329 or Schedule 2. If Box 7 shows code 1 with no exception, report the 10% additional tax on Schedule 2 of Form 1040, or on Form 5329 if you are claiming an exception not coded by the custodian.
4. Carry the income onto Schedule CA (540) or Schedule CA (540NR). The taxable amount from your 1099-R flows into California adjusted gross income and is taxed at California ordinary rates.
5. Complete FTB Form 3805P for the 2.5% California additional tax. If the early distribution applies, work through lines 1 to 4. Line 4 multiplies the early-distribution amount by 2.5%, or 6% for a SIMPLE IRA distribution in the first 2 years.
6. Include the Form 3805P result on your California return. Residents add it to Form 540 line 63. Nonresidents and part-year residents add it to Form 540NR line 73. Attach Form 3805P to your return.
7. Keep Form 5498 with your records. The custodian files Form 5498 with the IRS; you do not attach it, but it supports your year-end fair market value and any rollover or contribution figures.

If you are unsure which boxes apply or whether an exception covers you, a tax professional is the right call. Consult your tax advisor for your specific situation.

When tax-reporting forms surprise you in a bad way

The forms themselves do not create the tax bill; the underlying distribution does. Several situations make the paperwork land harder than savers plan for, and each is worth flagging before you act.

• Box 7 code 1 with no exception. Code 1 on a 1099-R puts you on Form 5329 or Schedule 2 federally and on Form 3805P in California. The 12.5% combined penalty stack sits on top of ordinary income tax at both levels.
• A federal exception that California does not honor. California does not conform to every federal exception. A clean federal Box 7 code 2 can still trigger the 2.5% California additional tax on Form 3805P. The instructions to Form 3805P spell out the non-conforming items.
• The IRA-to-HSA rollover trap. Federal law allows a one-time IRA-to-HSA rollover free of penalty. California does not conform. The FTB adds the rollover amount to California adjusted gross income and applies the 2.5% additional tax on Form 3805P (source: California FTB Form 3805P 2025 instructions).
• SIMPLE IRA, first 2 years. A distribution in the first 2 years of SIMPLE-IRA participation is coded S in Box 7 and runs at the 6% California rate on Form 3805P, not the standard 2.5%. The federal side runs at 25%, not 10%.
• Joint filers expecting one form. Each spouse or RDP must complete a separate Form 3805P for early distributions attributable to that person. If both owe, you add the two results together on Form 540 line 63.
• An in-kind metal withdrawal valued higher than expected. The custodian sets fair market value on the distribution day. A rising spot price on that day raises Box 2a on Form 1099-R, which raises the federal and California tax bills.

None of this makes a gold IRA wrong for California savers. It means the timing and form-coding of a distribution carry real tax weight. Modeling it with a tax advisor before you act is the careful step.

California gold IRA tax-form questions, answered

What is Form 1099-R for a gold IRA distribution?

Form 1099-R is the IRS form your gold IRA custodian uses to report your distribution. It shows the gross amount in Box 1, the taxable amount in Box 2a, federal withholding in Box 4, and a distribution code in Box 7. The custodian sends a copy to you and a copy to the IRS for each distribution year. Consult your tax advisor for your situation.

What does Box 7 of Form 1099-R mean for a California gold IRA owner?

Box 7 holds the distribution code. Code 1 means early with no known exception. Code 2 means early with an exception. Code 3 means disability and code 4 means death. Code 7 means a normal distribution at age 59.5 or older, and codes G and H mark direct rollovers. The code drives whether the 10% federal and 2.5% California additional taxes apply.

Do I attach Form 5498 to my California return?

No. Form 5498 is filed by your IRA custodian with the IRS, and a copy comes to you for your records. It reports contributions, rollovers in, conversions, the year-end fair market value in Box 5, and a required-minimum-distribution flag in Box 11. You keep it with your tax records; you do not attach it to your federal or California return.

What is FTB Form 3805P and when do I file it?

FTB Form 3805P is California's form for the additional tax on early distributions from qualified retirement plans, including IRAs. You file it if Box 7 of your 1099-R shows a distribution code other than 2, 3, or 4 and the distribution was early under California rules. Line 4 multiplies the early-distribution amount by 2.5%, with a higher 6% rate for a SIMPLE IRA in the first 2 years.

Where does the Form 3805P result go on my California return?

The result on Line 4 of Form 3805P is included in the total on Form 540 line 63 for California residents, or on Form 540NR line 73 for nonresidents and part-year residents. Attach Form 3805P to your return. Joint filers each complete a separate Form 3805P for the distributions attributable to that spouse or RDP, and add the two results together on the appropriate line.

Do I always need Form 5329 for the federal 10% additional tax?

Not always. Per IRS Topic 557, if Box 7 of your 1099-R shows code 1 and no exception applies, you can report the 10% additional tax on Schedule 2 of Form 1040 with a box checked. Form 5329 itself is then skipped. You do need Form 5329 if you are claiming a federal exception that your custodian did not code on the 1099-R.

How is an in-kind metal distribution reported on Form 1099-R?

An in-kind distribution of coins or bars is reported on Form 1099-R at the fair market value of the metal on the distribution day. The custodian sets that value from a published quote. The same Box 7 distribution code and the same federal and California reporting flow apply. Under age 59.5 with no exception, the 12.5% combined early tax applies to that fair market value too.

Does California really not conform to the IRA-to-HSA rollover?

Correct. The FTB Form 3805P 2025 instructions confirm California does not conform to the federal one-time IRA-to-HSA rollover. The rollover amount is added to California adjusted gross income and is subject to the 2.5% California additional tax on Form 3805P, even when the federal side allows the rollover penalty-free. Consult your tax advisor before relying on this move.