How the IRS taxes profit on gold and silver coins, bars and ETFs: the 28% collectibles rate for long-term gains, ordinary rates for short-term, how to compute basis, losses and a worked example.
Short answer: in the US, profit on gold and silver you sell is a capital gain. If you held the metal for a year or less, the gain is taxed at your ordinary income rate. If you held it for more than a year, the gain is a long-term gain on a collectible, taxed at your ordinary rate but capped at 28%. That cap is higher than the 0%, 15% or 20% rates that apply to long-term gains on stocks. This is general information, not tax advice. Check current IRS guidance or ask a tax professional.
The tax code groups gold, silver and other metals held as bullion with art, antiques and coins into one category called collectibles. Long-term gains from this category are taxed at ordinary rates up to a 28% maximum rather than at the lower long-term rates for stocks and bonds. The category applies whether you hold bars, rounds or coins such as American Eagles.
| How long you held it | Type of gain | Federal rate |
|---|---|---|
| One year or less | Short-term | Ordinary income rate (10% to 37%) |
| More than one year | Long-term collectible | Ordinary rate, maximum 28% |
If your ordinary rate is below 28%, the long-term collectible rate is your ordinary rate. For example, a taxpayer in the 24% bracket would pay up to 24% on the long-term gain, not 28%. On top of the federal rate, higher earners may owe the 3.8% net investment income tax, and your state may tax the gain too.
You bought ten 1-ounce silver coins for a total of $300 (including premium and shipping) and later sell them for $450. Your gain is $150. If you held them for 18 months, it is a long-term collectible gain. If your ordinary rate is 24%, the federal tax is about $36. If you were in the top bracket, the maximum would be 28%, or $42. If you had sold within a year, the same $150 would be taxed at your ordinary rate, which could be higher still. Use the bullion profit calculator to work out the gain before tax.
Your cost basis is what you paid to acquire the metal, including the dealer premium, sales tax and shipping or insurance. A higher basis means a smaller gain. If you bought at different times and prices, you need to know which lot you sold. The usual methods are specific identification, where you choose the lot, and first in first out. See our cost basis guide and the average cost calculator.
If you sell at a loss and held the metal as an investment, the loss generally offsets other capital gains, and up to $3,000 of ordinary income each year, with any excess carried forward. The rules for losses can depend on how you used the item, so check before relying on them. Premiums mean you start with a built-in loss when you sell at a bid price, which is why the spread matters.
| Holding | Typical treatment |
|---|---|
| Physical coins, bars, rounds | Collectibles |
| Physically backed bullion ETF (grantor trust) | Generally collectibles |
| Mining company stocks | Ordinary securities rates |
| Metals in a precious metals IRA | Tax-deferred or tax-free per IRA type; see IRA-eligible coins |
Sales tax is charged at purchase, not at sale, and it depends on the state. Many states exempt investment-grade bullion, some use a minimum purchase amount, and a few tax it. The tax you pay becomes part of your basis. Ask your dealer how your state treats your order.
You report sales on Form 8949 and carry totals to Schedule D, whether or not a dealer filed a form; see what the IRS is told about gold purchases and sales. Keep invoices and sale receipts for as long as the IRS can review the return. BullionKeeper stores each purchase with its date and cost, and the taxation overview explains the main ideas in plain terms.
If you held it for a year or less, the gain is taxed at your ordinary income rate. If you held it for more than a year, the gain is a long-term gain on a collectible, taxed at your ordinary rate up to a maximum of 28%. Your actual rate can be lower if your ordinary rate is below 28%.
Federal tax law treats precious metals held as bullion, including coins and bars, as collectibles, a category that also includes art and antiques. Long-term gains on collectibles have a higher maximum rate than long-term gains on stocks.
Physically backed gold and silver ETFs structured as grantor trusts are generally taxed as collectibles, so long-term gains face the same 28% maximum. Mining stocks and funds that hold stocks are taxed as ordinary securities. Check the fund's prospectus for how it is treated.
If you held the metal as an investment, a loss is generally a capital loss that offsets capital gains and up to $3,000 of ordinary income per year. Losses on personal-use items are not deductible. Check current rules or ask a tax professional.
It depends on the state. Many states exempt investment-grade bullion from sales tax, some exempt it above a minimum amount, and a few tax it. Check your state's rules and ask the dealer, since the rules differ for coins, bars and rounds.
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