Gold & Taxes: The Collectibles Rate, Reporting & Capital Gains
Straight answer
The IRS treats physical gold and silver — and most physically-backed gold ETFs — as collectibles, so long-term gains (on metal held more than a year) can be taxed at rates up to 28%, higher than the 0–20% that applies to most stocks. Gains on metal held a year or less are taxed as ordinary income. Dealers report large cash purchases and certain sales to the IRS, and state sales tax on bullion varies widely. This page is general information, not tax advice — talk to a tax professional about your situation.
Gold is one of the few investments the tax code singles out for harsher treatment. Knowing the rules before you buy — and keeping good records — is the difference between a clean sale and a surprise bill. Here is how it works.
Why the IRS calls gold a “collectible”
Under the federal tax code, physical precious metals fall into the same category as art, antiques, stamps, and rare coins: they are collectibles. That label matters, because it changes the rate you pay when you sell at a profit.
For most assets — stocks, mutual funds, real estate held long-term — long-term capital gains are taxed at 0%, 15%, or 20% depending on your income. Collectibles are different. When you hold gold or silver for more than one year and sell at a profit, the long-term gain is taxed at your ordinary income rate, but capped at 28%. If your ordinary rate is below 28%, you pay that lower rate; if it is above, the 28% ceiling applies. High earners may also owe the 3.8% Net Investment Income Tax on top.
The practical takeaway: a long-term gold gain can cost you more in tax than the same gain on stocks. That is not a reason to avoid gold — but it is a real, often-overlooked round-trip cost, sitting alongside dealer premiums over spot.
Short-term gains are taxed as ordinary income
If you sell gold you have held for one year or less, the gain is short-term and taxed as ordinary income — the same brackets that apply to your wages, which currently top out at 37%. There is no special collectibles cap for short-term gains; they simply ride your normal rate. Holding past the one-year mark moves you into long-term treatment (capped at 28%), so the holding clock matters.
Gold ETFs: taxed like the metal, not like a stock
This trips up a lot of investors. A physically-backed gold ETF — one that holds actual bullion in a vault, like the large funds — is generally treated by the IRS as if you owned the underlying metal. That means gains are taxed at the collectibles rate (up to 28%), not the 0–20% stock rate, even though you bought shares in a brokerage account. The fund typically reports your share of any metal it sells on your annual tax documents.
Gold mining stocks and mining-stock ETFs are different. Those are ordinary equities — you own a company, not metal — so they get the normal 0–20% long-term capital gains treatment. If you want gold exposure with standard stock taxation, miners are one route, though they carry company-specific and operational risk that bullion does not. We compare these vehicles in physical gold vs. ETFs and gold mining stocks.
Cost basis and record-keeping
Your taxable gain is the sale price minus your cost basis — generally what you paid for the metal, including the dealer premium and certain acquisition costs. The lower your documented basis, the larger your taxable gain looks, so good records protect you.
Keep, at minimum:
- Purchase receipts — date, item, quantity, price paid (premium included).
- Sale records — date sold, proceeds, and to whom.
- Storage and insurance costs if relevant, since some may affect basis or be deductible in specific circumstances (ask a professional).
If you inherit gold, your basis is usually the market value on the date of death (a “stepped-up” basis), not what the original owner paid — a meaningful difference. If you receive gold as a gift, you generally carry over the giver’s basis. When you can’t document what you paid, the IRS may treat your basis as zero, taxing the entire sale price as gain. For practical mechanics, see selling gold.
What dealers report to the IRS
Two reporting rules catch people off guard. Neither is a tax by itself — they are information reports — but both create a paper trail.
Form 8300 — large cash purchases
If you buy precious metals and pay more than $10,000 in cash (or cash-equivalents like cashier’s checks or money orders) in a single transaction or related series, the dealer must file Form 8300 with the IRS. This is an anti-money-laundering rule, not a sign you did anything wrong. Paying by personal check, wire, or card from a traceable account generally does not trigger it. Structuring purchases to dodge the threshold is itself illegal.
1099-B — certain bullion sales
When you sell back to a dealer, some items and quantities require the dealer to file a Form 1099-B reporting the proceeds to the IRS. The triggers are item-specific — driven by long-standing commodity rules — and apply to particular coins and bars at certain minimum quantities. Many popular government bullion coins are not reportable on sale, while certain bars and other coins are. The rules are technical; if you sell, ask the dealer whether your sale is reportable, and report your own gain regardless of whether a 1099-B is issued. A 1099-B reports proceeds, not your gain — your basis records still determine what you actually owe.
State sales tax: it depends where you are
Federal rules are uniform; sales tax is not. Many states exempt investment-grade bullion from sales tax, sometimes above a purchase threshold, and several have no sales tax at all. Other states do tax bullion, and rules for numismatic (collectible) coins versus plain bullion can differ within the same state.
Because the rules change and vary by metal, form, and dollar amount, check your own state’s current treatment before a large purchase — a few percent in sales tax can rival the dealer premium. Reputable dealers apply the correct tax based on your shipping address.
Gold in an IRA: tax-deferred, with strings attached
Holding eligible bullion inside a self-directed gold IRA changes the tax picture. Inside the account, gains are tax-deferred — you don’t owe the collectibles rate each time the custodian buys or sells. With a traditional IRA you pay ordinary income tax on withdrawals in retirement; with a Roth, qualified withdrawals are tax-free.
The catch: the metal must meet IRS fineness standards, be held by an approved custodian, and stored in an approved depository — home storage of IRA metal is prohibited. You also take on custodian and storage fees that eat into the tax advantage. It is a real benefit for some investors, not a free lunch.
How losses work
Gold can fall in value, and a documented loss is usable. If you sell physical metal or a gold ETF for less than your basis, the capital loss offsets capital gains elsewhere — including stock gains. If your losses exceed your gains, you can deduct up to $3,000 against ordinary income per year and carry the rest forward to future years.
One limit worth knowing: losses on metal held purely for personal use (like gold jewelry you wear) generally are not deductible. Investment-held bullion is what counts. As always, the line between “investment” and “personal” can be fuzzy — another reason to keep records and ask a professional.
Tax treatment at a glance
| Vehicle | Long-term gains | Short-term gains | Notes |
|---|---|---|---|
| Physical gold/silver | Collectibles rate, up to 28% | Ordinary income | Form 8300 on cash buys >$10k; some sales get 1099-B; sales tax varies by state |
| Physically-backed gold ETF | Collectibles rate, up to 28% | Ordinary income | Taxed like the metal, not the stock; fund reports on your tax docs |
| Gold mining stock / ETF | Standard 0–20% | Ordinary income | Treated as ordinary equity; carries company risk |
| Gold inside an IRA | Tax-deferred (traditional) or tax-free qualified (Roth) | Tax-deferred / tax-free | Approved custodian + depository required; no home storage |
The bottom line
Gold’s collectibles status means a long-term gain can be taxed more heavily than a stock gain — up to 28% versus 0–20%. Most gold ETFs share that fate; miners and IRA-held metal do not. Keep every receipt, know that big cash purchases and certain sales get reported, and check your state’s sales tax before you buy. None of this should decide whether gold belongs in your portfolio — that question lives in our buying gold guide — but it should shape how you buy, hold, and sell.
This is general information, not tax advice. Tax rules change, depend on your income and state, and have exceptions this page doesn’t cover. Consult a qualified tax professional or CPA before making decisions.
Are gold and silver really taxed at a higher rate than stocks?
For long-term gains, often yes. Physical metals are taxed as collectibles at up to 28%, while most stocks are taxed at 0–20% long-term. Short-term gains on both are taxed as ordinary income. Your actual rate depends on your income — the 28% is a ceiling, not a flat rate.
Does the dealer report my gold purchase to the IRS?
Only in specific cases. A dealer must file Form 8300 if you pay more than $10,000 in cash or cash-equivalents. Paying by traceable check, wire, or card generally doesn’t trigger a report. Certain bullion sales back to a dealer require a Form 1099-B based on the item and quantity.
Do I pay sales tax when I buy gold?
It depends on your state. Many states exempt investment-grade bullion (sometimes above a dollar threshold), and some have no sales tax at all; others tax it. Check your state’s current rules before a large purchase, since sales tax can rival the dealer premium.
How is gold taxed inside an IRA?
Gains are tax-deferred inside the account. Traditional IRA withdrawals are taxed as ordinary income in retirement; qualified Roth withdrawals are tax-free. The metal must be held by an approved custodian in an approved depository — home storage of IRA metal is prohibited.