How Gold and Silver Investments Are Taxed

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Physical gold and silver are taxed as collectibles in the United States. You owe nothing while you hold them. When you sell at a profit, a gain on metal held one year or less is taxed as ordinary income. A gain on metal held more than one year is taxed at your ordinary rate but capped at 28%, which is higher than the 0%, 15% and 20% rates that apply to long-term gains on stocks.

How the collectibles rate works

The tax applies to gains you have actually realized through a sale or exchange. Selling gold for cash, trading silver bars for gold coins, or swapping one bullion product for another are all taxable events. Since 2018, like-kind exchange treatment applies only to real estate, so a metal-for-metal swap no longer defers tax.

The holding period determines which rule applies:

• Held one year or less: the gain is short-term and is taxed at your ordinary income tax rate, the same as wages.
• Held more than one year: the gain is long-term collectible gain, taxed at your ordinary rate but never above 28%.

The 28% figure is a ceiling, not a flat rate. A filer in the 12% or 22% bracket pays that bracket’s rate on long-term collectible gain, while a filer in the 32%, 35% or 37% bracket pays 28%. The 15% rate on long-term capital gains from stocks does not apply to physical gold.

Higher-income investors may also owe the 3.8% net investment income tax on top of the collectibles rate. It applies when modified adjusted gross income exceeds $200,000 for single filers or $250,000 for married couples filing jointly.

How other gold and silver investments are taxed

The collectible label follows the metal, not only the coin or bar in your safe:

• Physically backed gold and silver ETFs structured as grantor trusts are treated as owning the metal. Long-term gains on their shares are taxed as collectibles at up to 28%.
• Gold and silver futures regulated as Section 1256 contracts are taxed 60% long-term and 40% short-term at standard capital gains rates, regardless of holding period, and are marked to market at year-end.
• Mining company stocks and funds that hold mining stocks are taxed like any other stock, so long-term gains qualify for the 0%, 15% or 20% rates.
• Jewelry held for personal use is also a collectible. A gain on a sale is taxable, but a loss on personal-use property is not deductible.

Cost basis and what you can add to it

Your taxable gain is the sale proceeds minus your cost basis, so a higher basis means a smaller gain.

Purchase price and acquisition costs. If you bought the metal yourself, basis starts with the price you paid. The dealer premium over spot is part of that price. Commissions, shipping and insurance on delivery, and any sales tax you paid at purchase are also added to basis. Selling costs, such as a dealer’s spread or fees at the time of sale, reduce your amount realized.

Gifts. When you receive gold or silver as a gift, you generally take the donor’s basis (carryover basis), and the donor’s holding period carries over too. One exception: if the metal’s fair market value on the date of the gift was lower than the donor’s basis, you use that lower value to calculate a loss when you sell.

Inheritance. Inherited metal gets a basis equal to its fair market value on the date of death. Inherited property is treated as held long-term no matter how soon you sell it.

Are storage fees for precious metals tax deductible?

For most individuals, no. Depository fees, safe deposit box rent and insurance on bullion you hold as an investment were deductible only as miscellaneous itemized deductions subject to the 2% of adjusted gross income floor. The Tax Cuts and Jobs Act suspended that category beginning in 2018, and 2025 tax legislation made the elimination permanent.

Some guides suggest adding ongoing storage costs to basis instead. Holding costs are not acquisition costs, and the Internal Revenue Code allows carrying charges to be capitalized only through a limited election. Treat storage fees as non-deductible unless a tax professional confirms otherwise.

Two exceptions are worth knowing:

• A business holding metal as inventory or for trade, such as a coin dealer, deducts storage and insurance as ordinary business expenses. Its sales produce ordinary business income rather than collectible capital gain.
• Fees inside a precious metals IRA are usually paid from the account. They reduce the account’s value but are not deductible on your personal return.

How to report gold and silver sales

Sales of physical metal go on Form 8949, and the totals carry to Schedule D of Form 1040. Long-term collectible gain is figured separately on the 28% Rate Gain Worksheet in the Schedule D instructions, which is how the cap is applied. Any tax is due with your annual return, not at the time of sale, although large gains may call for estimated payments to avoid an underpayment penalty.

Dealers file Form 1099-B only for certain bullion sales. Under IRS rules, reportable sales include:

• U.S. 90% silver dimes, quarters or half dollars with a total face value of $1,000 or more
• 25 or more one-ounce Gold Maple Leaf, Gold Krugerrand or Gold Mexican Onza coins
• Gold bars totaling one kilogram or more
• Silver bars totaling 1,000 troy ounces or more

Sales of American Gold Eagle coins and many other products do not trigger a 1099-B, but every taxable gain must be reported whether or not you receive a form. Separately, a dealer that receives more than $10,000 in cash in a single transaction or related transactions must file Form 8300.

Examples

Example 1: Long-term gain in a top bracket

You buy 100 ounces of gold at $1,330 per ounce, for a total of $133,000 including premium. Two years later you sell all 100 ounces at $2,300 per ounce for $230,000. You are in the 37% bracket.

• Gain: $230,000 minus $133,000 = $97,000
• Tax at the 28% cap: $97,000 × 28% = $27,160

If your income also exceeds the net investment income tax threshold, up to $97,000 × 3.8% = $3,686 could be added.

Example 2: Offsetting with a loss

In the same year, you sell silver coins for $500 less than your basis. The loss nets against the gold gain, which drops to $96,500, and tax at 28% falls to $27,020, a saving of $140.

Example 3: Short-term sale

You buy a 100-ounce silver bar for $3,000 and sell it ten months later for $3,800. The $800 short-term gain is taxed at your ordinary rate: $192 in the 24% bracket. Holding more than one year would not have lowered the rate, because 24% is below the 28% cap. The holding period saves money mainly for filers whose bracket is above 28%.

Losses and how they offset gains

Capital losses first offset capital gains in the same year. Collectible gains and losses are netted within their own group before being combined with other capital gains, so a loss on stock can reduce a collectible gain and vice versa. If losses exceed gains, up to $3,000 of the excess ($1,500 if married filing separately) reduces ordinary income each year, and any remainder carries forward indefinitely.

The wash sale rule applies to stock and securities. Physical bullion is generally not a security, but shares of a metal ETF are, so selling an ETF at a loss and buying it back within 30 days can disallow the loss.

Gold and silver in an IRA

Buying collectibles in an IRA is normally treated as a distribution. The Internal Revenue Code makes an exception for certain bullion and coins held by a trustee or custodian:

• Gold must be at least 99.5% pure, silver at least 99.9% and platinum at least 99.95%.
• American Gold Eagle coins are allowed by statute even though they are 91.67% gold. American Silver Eagles also qualify, as do bars and coins such as Canadian Maple Leafs that meet the fineness standards.
• The metal must be held by an approved custodian or depository. Keeping IRA metal at home generally counts as a distribution.

Inside the account, gains are not taxed when metal is sold. Traditional IRA distributions are ordinary income, and the 28% collectibles rate does not apply. Qualified Roth IRA distributions are tax-free. The usual rules on taxes on IRA withdrawals, including early-withdrawal penalties, apply.

Special situations

Giving away appreciated gold or jewelry. A gift is not a sale, so the giver owes no capital gains tax, and the recipient takes the giver’s basis. If the value exceeds the annual gift tax exclusion, the giver files Form 709, but gift tax is rarely owed because the excess counts against the giver’s lifetime exemption.

Found or mined gold. Treasure you find is ordinary income at its fair market value in the year you take possession. Gold produced by a mining business is business income. In both cases, the value taxed when you acquire the metal becomes your basis for a later sale.

Sales tax on purchases. There is no federal sales tax on buying gold or silver. State sales tax rules on bullion vary, and many states exempt it.

Scrap gold. Selling old jewelry or dental gold for its metal value is taxable to the extent the proceeds exceed your basis. Without records of what you paid, proving basis is difficult.

Records to keep

Keep the dealer invoice or receipt for every purchase and sale, showing the date, product, quantity, purity and total price including premium, shipping and sales tax. For gifts, keep the donor’s purchase records and the value on the gift date. For inherited metal, keep an appraisal or a dated price record for the date of death. Keep records for at least three years after you file the return reporting the sale, the IRS’s standard examination period.

The Bottom Line

Investors who buy coins, bars or metal-backed ETFs face the collectibles rules, which matter most for filers in brackets above 28% and for those near the 3.8% net investment income tax thresholds. Keep every invoice, including premium, shipping and sales tax, to support your basis. Report each gain on Form 8949 and Schedule D, even when no 1099-B arrives.