How gold and silver are taxed when you sell

At a glance

How the IRS classifies it	A collectible, which is a type of capital asset
Owned more than a year	Your income tax rate, capped at 28%
Owned a year or less	Your income tax rate
Higher incomes	Possibly the 3.8% net investment income tax as well
Where you report it	Form 8949 (code C) and Schedule D
If you sell at a loss	Offsets gains, plus up to $3,000 a year of other income

Why gold is taxed as a collectible

The tax code has a separate category for collectibles. The IRS lists metals such as gold, silver and platinum bullion in it, along with coins, art, antiques and stamps. Collectibles are capital assets, like stocks, but long-term gains on them don’t get the lower rates that stocks get.

For stocks held more than a year, most people pay 15%, and the top rate is 20%. For collectibles, the gain is taxed at your ordinary income tax rate, but never more than 28%. If the gain falls in the 22% or 24% bracket, that’s the rate you pay. Once it reaches the 32% bracket or higher, the 28% cap applies.

It makes no difference whether the metal is a legal tender coin, a bar or a round. An American Gold Eagle has a face value, but a gain on it is taxed as a collectible like any other bullion.

An example

Say you bought 10 ounces of gold for $25,000 and later sold them for $40,000. Your gain is $15,000. Here’s roughly what the federal income tax would be in three situations:

Situation	Rate on the gain	Federal tax
Owned over a year, gain in the 24% bracket	24%	$3,600
Owned over a year, gain in the 35% bracket	28% (the cap)	$4,200
Owned a year or less, gain in the 35% bracket	35%	$5,250

A stock gain of the same size, held more than a year, would usually cost $2,250 at the 15% rate. That gap is worth knowing if you’re deciding what to hold in a taxable account.

Higher earners may also owe the 3.8% net investment income tax on the gain. It applies when your modified adjusted gross income is above $200,000, or $250,000 for married couples filing jointly ($125,000 if you’re married and file separately). Your state may tax the gain too.

Short-term and long-term

The holding period decides which rules apply. Count from the day after you bought the metal. If you sell more than a year later, the gain is long-term and gets the collectibles treatment above. If you sell within a year, the gain is short-term and is taxed as ordinary income, with no cap.

Working out your gain

Your gain is what you received from the sale minus your cost, which the IRS calls your basis. Your basis is what you paid for the metal, including the dealer’s premium over the spot price. Sales tax and shipping you paid when buying count too. Fees the dealer charges when you sell reduce what you received.

Keep your receipts, invoices and dealer statements for as long as you own the metal and for a few years after you report the sale. If you bought at different times and prices, note which purchase each sale comes from. Without records it’s hard to show what you paid, and you could end up taxed on far more than your real profit.

Selling at a loss

If you sell for less than your basis, you have a capital loss. It offsets your capital gains for the year, including gains on stocks. If your losses are larger than your gains, you can deduct up to $3,000 of the difference from your other income ($1,500 if you’re married and file separately) and carry the rest forward to later years.

Swapping one metal for another

Trading gold for silver, or coins for bars, is treated as selling one and buying the other, so any gain on the metal you give up is taxable. Before 2018, some investors used like-kind exchanges to put off that tax. Since then, like-kind exchanges have applied only to real estate, and the IRS names collectibles among the things that don’t qualify.

Gold and silver in an IRA

Buying and selling metal inside an IRA isn’t taxed. Tax comes when you take money or metal out, and the collectibles rate doesn’t apply to IRA withdrawals.

• Traditional IRA: withdrawals are taxed as ordinary income. If you take the metal itself, its fair market value on that day counts as the amount withdrawn. That value becomes your basis in the coins or bars, and any later gain is taxed as a collectible.
• Roth IRA: qualified withdrawals are tax-free, whether you take cash or metal.
• Before age 59½: a 10% additional tax usually applies to withdrawals, on top of any income tax.

Keeping IRA metal at home counts as taking it out of the account, which can bring the same tax bill. Our guides to how a gold IRA works and home storage gold IRAs explain the rules.

Gold ETFs and mining stocks

Funds that hold physical metal, such as SPDR Gold Shares (GLD), are usually set up as trusts, and the IRS looks through them to the metal they hold. GLD’s own tax FAQ says gains on shares held more than a year are taxed at up to 28%, the same as owning the gold directly. Our guide to gold ETFs compares them with coins and bars.

Shares of gold mining companies are ordinary stocks, taxed at the normal capital gains rates. Funds that trade gold futures follow different rules again, so check a fund’s tax documents before you buy.

Inherited and gifted gold

If you inherit gold or silver, your basis is generally its value on the date the owner died. Any rise in value during their lifetime isn’t taxed when you sell, and your gain counts as long-term however soon you sell.

A gift works differently. You generally take over the giver’s basis and holding period, so the tax on their gain is put off until you sell. If the metal was worth less than the giver’s basis when you received it, special rules apply to working out a loss.

What dealers report to the IRS

Some sales are reported on Form 1099-B. The IRS rules tie reporting to the metals and minimum quantities traded on regulated futures exchanges, and a customer’s sales within 24 hours are added together. In practice, dealers usually report sales of 25 or more 1 oz Krugerrands, Maple Leafs or Mexican 50-peso coins at once, or gold bars totaling a kilo or more. Sales of Gold Eagles generally aren’t reported.

Whether or not the dealer files anything, a profitable sale is taxable and belongs on your return. Separately, a dealer that receives more than $10,000 in cash has to file Form 8300. That’s a cash-reporting rule, and our guide to buying gold locally explains how it works. For the practical side of selling, see how to sell gold and silver.

Reporting the sale

Report each sale on Form 8949 and carry the totals to Schedule D. For a collectible, enter code “C” in column (f). The 28% rate gain worksheet in the Schedule D instructions works out the tax, and tax software does the same once you mark the sale as a collectible. If you’ve sold a large amount, or the metal came from an estate or an IRA, a tax professional can check the numbers.

Frequently asked questions