How Is Gold Taxed by the IRS?
The IRS classifies physical gold, silver, platinum, and palladium as “collectibles” under IRC Section 408(m)(2). This classification carries a significant tax consequence: long-term capital gains on collectibles are taxed at a maximum rate of 28%, compared to the standard 15% or 20% rate that applies to stocks, bonds, and real estate.
This means gold investors pay 8-13 percentage points more in federal tax on long-term gains than stock investors in the same tax bracket. On a $50,000 long-term gain, that difference is $4,000-6,500 in additional tax.
The 28% rate applies to physical gold (coins, bars, rounds), gold ETFs that hold physical metal (GLD, GLDM, SGOL, IAU), and gold futures contracts. Gold mining stocks are taxed at normal capital gains rates because they are equities, not collectibles.
What Is the Difference Between Short-Term and Long-Term?
The holding period determines which rate applies.
Short-term (held 1 year or less): Gains are taxed as ordinary income at your marginal tax rate. For high earners, this can be 32%, 35%, or 37%, which is actually higher than the 28% collectibles rate. For those in the 24% bracket or below, short-term rates may be lower than or equal to the collectibles rate.
Long-term (held more than 1 year): Gains are taxed at the 28% collectibles rate, or your marginal ordinary income rate if lower. Investors in the 10%, 12%, 22%, or 24% brackets pay their marginal rate, not the full 28%.
| Tax Bracket | Short-Term Gold Rate | Long-Term Gold Rate | Long-Term Stock Rate |
|---|---|---|---|
| 10% | 10% | 10% | 0% |
| 12% | 12% | 12% | 0% |
| 22% | 22% | 22% | 15% |
| 24% | 24% | 24% | 15% |
| 32% | 32% | 28% | 15% |
| 35% | 35% | 28% | 15% |
| 37% | 37% | 28% | 20% |
The 28% cap only benefits investors in the 32%+ brackets. For investors in the 24% bracket or below, long-term gold gains are taxed at the same rate as ordinary income. There is no preferential rate advantage to holding gold long-term for lower-bracket investors, unlike stocks where the 0% or 15% rate creates a clear incentive.
Net Investment Income Tax (NIIT): An additional 3.8% surtax applies to net investment income for individuals with modified AGI above $200,000 ($250,000 for married filing jointly). This pushes the effective maximum gold tax rate to 31.8%.
What Are the Reporting Requirements?
When Does a Dealer Report Your Purchase?
Under current IRS rules, precious metals dealers are not required to report customer purchases to the IRS. There is no Form 1099 or equivalent filing triggered by buying gold.
One exception: cash transactions over $10,000 require the dealer to file IRS Form 8300 (Report of Cash Payments Over $10,000). This applies to physical cash, cashier’s checks, money orders, and bank drafts. It does not apply to personal checks, wire transfers, or credit card payments.
Structuring transactions to avoid the $10,000 threshold (for example, making two $6,000 cash purchases on consecutive days) is a federal crime under 31 USC 5324.
When Does a Dealer Report Your Sale?
Dealers are required to file IRS Form 1099-B for certain precious metals sales. The reporting thresholds depend on the product type and quantity:
| Product | Reportable Quantity | Reportable? |
|---|---|---|
| 1 oz Gold Maple Leaf | 25+ oz in a single transaction | Yes |
| 1 oz Gold Krugerrand | 25+ oz in a single transaction | Yes |
| 1 oz Gold Mexican Onza | 25+ oz in a single transaction | Yes |
| Gold bars (.995+) | 1 kilo (32.15 oz)+ per transaction | Yes |
| American Gold Eagles | Any quantity | No |
| American Gold Buffalos | Any quantity | No |
| Pre-1933 gold coins | Any quantity | No |
| Silver bars (1,000 oz+) | 1,000 oz+ per transaction | Yes |
| 90% silver coins | $1,000+ face value per transaction | Yes |
| American Silver Eagles | Any quantity | No |
Important clarification: Non-reportable does not mean non-taxable. All capital gains on gold are taxable regardless of whether the dealer files a 1099-B. The IRS expects taxpayers to self-report gains on Schedule D and Form 8949.
How Do You Calculate Your Tax Basis?
Your cost basis is the total amount paid for the gold, including premiums, shipping, and any sales tax charged at purchase. This is the number subtracted from the sale proceeds to determine the taxable gain or loss.
Example:
- Purchased 10 oz gold bar for $25,750 (includes $250 premium and $0 sales tax)
- Shipping cost: $25
- Total cost basis: $25,775
- Sold two years later for $29,000
- Taxable gain: $29,000 - $25,775 = $3,225
- Tax at 28%: $903
Cost basis methods: If you purchased gold at different times and prices, you must identify which specific lot you are selling (specific identification method) or use FIFO (first in, first out). Specific identification allows you to choose the lot with the highest basis, minimizing the taxable gain.
Keep meticulous records: purchase receipts, dealer confirmations, shipping invoices, and sale documentation. The IRS can request substantiation of cost basis at any time.
What About State Taxes on Gold?
State tax treatment of precious metals varies significantly.
States with no sales tax on precious metals purchases (as of 2026): Alaska, Delaware, Montana, New Hampshire, Oregon (no state sales tax at all), plus roughly 42 states that exempt bullion and coins from sales tax either fully or above a minimum purchase threshold.
States that still charge sales tax on gold: A handful of states (Vermont, New Mexico, Hawaii, Maine, Wisconsin, and others depending on the year) apply some level of sales tax to bullion purchases. This adds 4-7% to the purchase cost, dramatically impacting the effective premium.
State capital gains tax: Most states with an income tax treat collectibles gains as ordinary income. A few states (Florida, Texas, Nevada, Wyoming, South Dakota, Washington, Alaska, New Hampshire) have no state income tax, making them the most tax-efficient states for gold investors.
For detailed state-by-state sales tax information, see our sales tax guide.
What Are Tax Minimization Strategies for Gold?
Hold for More Than One Year
For investors in the 32%+ tax brackets, holding gold for more than one year caps the rate at 28% instead of paying 32-37% on short-term gains. The savings are 4-9 percentage points, or $2,000-4,500 on a $50,000 gain.
Tax-Loss Harvesting
Selling gold positions at a loss to offset gains on other investments is permitted. Gold losses can offset gold gains, stock gains, and up to $3,000 of ordinary income per year. Unused losses carry forward indefinitely.
The wash sale rule: The IRS wash sale rule (IRC Section 1091) prevents claiming a loss if you repurchase a “substantially identical” security within 30 days. Whether this applies to physical gold is debated. Selling a 1 oz Eagle and buying a 1 oz Maple Leaf within 30 days could be argued as non-identical (different products). However, selling and repurchasing the same product within 30 days likely triggers the wash sale rule. Consult the specific IRS guidance and consider waiting 31 days.
Gold IRA for Tax Deferral
A self-directed IRA holding physical gold defers all capital gains until distribution. In a traditional IRA, gains are taxed as ordinary income upon withdrawal (not at the collectibles rate). In a Roth IRA, qualified distributions are completely tax-free.
Roth Gold IRA: The most tax-efficient gold ownership structure for long-term holdings. Gold gains compound tax-free, and qualified distributions (after age 59.5, account open 5+ years) owe zero federal tax. The trade-off is the Roth contribution limits ($7,000/year, $8,000 if 50+, as of 2026) and the requirement for depository storage.
See our complete Gold IRA guide for setup, custodian selection, and fee analysis.
Opportunity Zone and 1031 Exchange Considerations
1031 like-kind exchanges, once used to defer capital gains on gold (trading one gold product for another), were eliminated for personal property by the Tax Cuts and Jobs Act of 2017. Only real estate qualifies for 1031 exchanges under current law.
Opportunity Zone investments can defer capital gains from gold sales if invested within 180 days, but the Qualified Opportunity Fund must invest in qualifying real estate or businesses, not in more gold.
Charitable Giving
Donating appreciated gold held more than one year to a qualified 501(c)(3) charity allows you to deduct the full fair market value without paying any capital gains tax. On a position with a $20,000 gain, this eliminates $5,600 in federal tax (28%) while providing a charitable deduction of the full market value.
The charity must be willing to accept physical gold, and the donation of property worth over $5,000 requires a qualified appraisal. Many charities work with precious metals dealers to liquidate donated metals.
Frequently Asked Questions
Do I pay tax on gold I inherited?
Inherited gold receives a stepped-up cost basis equal to the fair market value on the date of the decedent’s death. If your parent purchased gold at $400/oz and it was worth $2,500/oz at their death, your basis is $2,500. Selling at $2,500 generates zero taxable gain. This stepped-up basis is one of the most significant tax advantages of holding physical gold. See our estate planning guide for more.
Does the IRS know I own gold?
The IRS does not automatically know about gold purchases (dealers do not report buys). They receive 1099-B forms for certain qualifying sales. However, large cash payments trigger Form 8300 reporting. Bank records showing wire transfers to precious metals dealers create an audit trail. The IRS expects self-reporting of all gains, and audits can discover unreported gold transactions through bank record review.
Are gold ETFs taxed differently than physical gold?
Physical gold ETFs (GLD, GLDM, IAU, SGOL) are taxed identically to physical gold: 28% maximum on long-term gains. The ETF’s structure as a grantor trust means shareholders are treated as owning a proportional share of the underlying gold. Gold mining ETFs (GDX, GDXJ) are taxed as standard equities at 15%/20% long-term rates.
Can I avoid the 28% rate by buying gold stocks instead?
Yes. Gold mining stocks and gold mining ETFs are taxed at the standard 15%/20% long-term capital gains rate. The trade-off is that mining stocks carry company-specific risk, management risk, and cost-of-production risk that physical gold does not. Mining stocks are leveraged gold exposure, not a direct substitute for physical metal.
What records should I keep for gold taxes?
Maintain: purchase receipts with date, quantity, product, price paid, and dealer name. Shipping invoices showing delivery costs. Sale confirmations with date and proceeds. Photographs of serial numbers on bars. Cost basis calculations for each lot. Keep these records permanently, not just for the standard three-year audit window, as gold holding periods can span decades.