How is gold taxed when you sell it?

The collectibles classification

Under US federal tax law, physical gold (and most other physical precious metals) is classified as a 'collectible' for capital gains purposes under Internal Revenue Code Section `408(m)`. This classification matters because long-term capital gains on collectibles are taxed at a maximum rate of `28%` — higher than the `20%` maximum that applies to most other long-term gains (stocks, bonds, real estate). The collectibles rate sits between the long-term equity-gain rate and the highest ordinary-income rate, reflecting Congress's intent to treat physical precious metals as a distinct asset class.

The `28%` figure is a ceiling, not a flat rate. Your actual long-term collectibles tax rate equals the lower of your ordinary marginal income tax rate or `28%`. A taxpayer whose marginal ordinary rate is `12%` pays `12%` on long-term gold gains; a taxpayer at the `37%` top marginal bracket pays `28%`. The Net Investment Income Tax (NIIT) of `3.8%` can also apply to high-income taxpayers on bullion gains, pushing the effective rate to `31.8%` for affected filers. State-level capital gains taxes apply on top of federal.

Long-term vs short-term gains

Short-term gains (gold held one year or less) are taxed as ordinary income at the seller's marginal tax bracket — no collectibles preference applies because the favorable rate kicks in only for long-term holding. For a taxpayer at the `32%` ordinary bracket, a short-term gold gain is taxed at `32%`. For someone at the `37%` top bracket, it's `37%`. Short-term gold trades are tax-inefficient compared to long-term holds.

The one-year holding period runs from the day after acquisition to the date of sale, calendar-day measured. Buy October `15, 2023`; the earliest day a sale qualifies for long-term treatment is October `16, 2024`. Sell on October `15, 2024` and the entire gain is short-term, taxed at ordinary rates. The arithmetic matters: an investor who would owe `28%` on a `$50,000` long-term gain (`$14,000` tax) but `37%` on the same as short-term (`$18,500` tax) saves `$4,500` by waiting one additional day across the year boundary.

Calculating your basis

Basis equals what you paid, including premiums over spot, shipping, insurance, and sales tax on the original purchase. For a bullion-grade `1 oz` American Gold Eagle purchased for `$2,520` (`$2,400` spot + `5%` premium), the basis is `$2,520` — even though the gold content was only `$2,400` of value at purchase. Gain on sale equals net sale proceeds minus basis. Sale price of `$3,000` minus basis of `$2,520` = `$480` taxable gain.

Multiple-purchase situations require lot tracking. If you bought `5` Eagles at `$2,520` each in `2022` and `5` Eagles at `$2,700` each in `2024`, then sell `3` Eagles in `2026`, you need to choose which lot to sell from. Specific-identification (you designate which `3` coins) gives you flexibility to optimize the gain. Absent specific identification, FIFO (first-in-first-out) typically applies. Keep purchase invoices indefinitely; the IRS does not have a statute of limitations on basis verification for assets you continue to hold.

Dealer reporting (1099-B)

Dealers must file IRS Form `1099-B` reporting certain customer sales above specific thresholds. The triggers are product-specific: sales (by you to the dealer) of `25` or more `1 oz` Gold Krugerrands, Maple Leafs, or Mexican Onzas trigger reporting; sales of `1 kg` gold bars or `100 oz` gold bars in certain finenesses trigger reporting; sales of American Gold Eagles are specifically excluded from `1099-B` reporting per IRS rules. The dealer files the `1099-B` with the IRS and sends a copy to you.

The `1099-B` triggers do not change your underlying tax obligation. Whether or not the dealer files a `1099-B`, you still owe capital gains tax on a profitable sale. The form changes only whether the IRS receives an independent third-party report of the transaction. Most US bullion sellers are tempted to think 'no `1099-B` = no taxable event' — this is incorrect. The IRS expects you to self-report all capital-asset sales on Schedule D regardless of whether a third-party form was filed.

Self-reporting on Schedule D

Sales of physical gold are reported on IRS Form `8949` and flow through to Schedule D (Capital Gains and Losses) on Form `1040`. The taxpayer enters acquisition date, sale date, proceeds, basis, and resulting gain or loss for each disposition. For collectibles like physical gold, gains are categorized separately so the `28%` maximum rate can be applied via the Schedule D Tax Worksheet (or its successor in the current IRS instructions).

Losses on physical gold sales are deductible on Schedule D against other capital gains, with up to `$3,000` of net capital loss applied against ordinary income per year (excess carried forward). The wash-sale rule that applies to stocks and securities does not apply to collectibles in the same way; you can realize a gold loss and re-purchase identical gold the next day without losing the loss deduction (consult a CPA — interpretation has nuances). Keep Schedule D records, supporting Form `8949`, and dealer paperwork for at least three years past the filing date, longer if you continue to hold other lots of the same asset.

Real-world example — a 7-year coin sale tax calculation

Consider an investor who purchased `20 × 1 oz` American Gold Eagles in August `2019` at `$1,520` per coin (`$1,450` spot + `4.8%` premium), total basis `$30,400`. In November `2026`, the investor sells the entire lot to a major online dealer for `$2,500` per coin (`$2,600` spot less a small buy-back discount), total proceeds `$50,000`. Holding period: over `7` years (long-term). Total gain: `$50,000 − $30,400 = $19,600`.

The investor is in the `32%` ordinary marginal bracket. Long-term collectibles rate is the lower of `32%` or `28%` = `28%`. Federal tax on the `$19,600` long-term gain: `$5,488`. NIIT does not apply at this income level. State capital gains tax (illustrative `5%` state) adds another `$980`. Total tax: `$6,468`, leaving net after-tax of `$43,532` on the original `$30,400` basis. American Gold Eagles are specifically excluded from `1099-B` dealer reporting per IRS rules, so no third-party form is filed — but the investor still reports the sale on Form `8949` and Schedule D and pays the tax owed. Records kept: original dealer invoice from `2019` (showing the `$30,400` basis), the `2026` dealer sale confirmation, and the Form `8949` worksheet.

Common misconceptions about gold taxation

**'Gold gains are taxed at the same rate as stocks.'** No. Physical gold is a collectible under IRS rules; long-term gains carry a `28%` maximum rate versus `20%` maximum for most other long-term capital gains. The difference is material for high-income filers.

**'No 1099-B = no taxable event.'** No. The `1099-B` is the dealer-reporting trigger, not the taxable-event trigger. Whether or not a `1099-B` is filed, you owe capital gains tax on profitable sales and must self-report on Schedule D.

**'I can claim a loss and buy back the next day without restriction.'** Probably yes for collectibles, but the wash-sale rule interpretation has nuances. Consult a CPA before relying on this position for any large loss harvest.

What this means for you

Physical gold gains are taxed at a maximum `28%` long-term collectibles rate, higher than the `20%` maximum for most other long-term gains. Short-term gains are taxed as ordinary income. Track basis carefully — keep dealer invoices indefinitely. Self-report on Schedule D regardless of whether a Form `1099-B` was filed. Inside an IRA wrapper, gains compound tax-deferred (Traditional) or tax-free-on-qualified-distribution (Roth), which is one of the structural reasons many investors prefer Gold IRA wrappers over after-tax holdings for substantial allocations. As always, BullionLens does not provide tax advice; consult a CPA who knows your specific situation.