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Tax Reporting for Precious Metals: IRS Rules You Need to Know

The IRS has specific rules for how precious metals are taxed and reported. Understanding these rules before you buy ensures you keep accurate records, minimize your tax burden legally, and avoid surprises at filing time. This guide covers capital gains treatment, 1099-B dealer reporting requirements, cash transaction rules, and the tax advantages of holding metals in an IRA. This is educational information, not tax advice. Consult a qualified tax professional for your specific situation.

How the IRS Classifies Precious Metals

The Internal Revenue Service classifies physical gold, silver, platinum and palladium as "collectibles" under IRS Publication 544. This classification matters because collectibles receive different capital gains treatment than stocks, bonds or real estate.

When you sell precious metals at a profit after holding them for more than one year, the gain is taxed at the collectibles capital gains rate of up to 28%. This is higher than the standard long-term capital gains rate of 15% or 20% that applies to most other investment assets. If your marginal income tax rate is below 28%, you pay your marginal rate instead. The 28% rate functions as a cap, not a floor.

Short-term gains on metals held less than one year are taxed at your ordinary income tax rate, just like any other short-term capital gain. For high-income earners in the 37% federal bracket, this creates a meaningful incentive to hold metals for at least one year before selling.

Losses on precious metals sales are deductible against capital gains. If you sell silver at a loss, that loss can offset gains from other investments including stocks and real estate. Net capital losses up to $3,000 per year can be deducted against ordinary income, with excess losses carried forward to future tax years.

1099-B Reporting: When Dealers Must Report to the IRS

Dealers are required to file IRS Form 1099-B for certain customer sell-back transactions that meet specific product type and quantity thresholds. A 1099-B reports the gross proceeds of the sale to both the IRS and the customer. It does not report your cost basis or profit; you are responsible for calculating and reporting your gain or loss on your tax return.

The 1099-B requirement applies only when you sell metals back to a dealer. Buying metals from a dealer does not trigger a 1099-B. The thresholds are based on the type and quantity of metal sold in a single transaction, as defined by the IRS and the Industry Council for Tangible Assets (ICTA).

Importantly, the absence of a 1099-B does not mean you owe no taxes. You are legally obligated to report all capital gains on your tax return regardless of whether a 1099-B is filed. The 1099-B is an information return for the IRS; your tax obligation exists independently.

Reportable Transactions: 1099-B Thresholds

The following table summarises which precious metals transactions require dealer 1099-B reporting when a customer sells to a dealer. Thresholds are per single transaction.

Product Type 1099-B Threshold Reportable? Notes
American Gold EaglesAny quantityNoExempt from 1099-B reporting
American Silver EaglesAny quantityNoExempt from 1099-B reporting
Gold Maple Leafs (1 oz)25 or moreYesPer single transaction
Gold Krugerrands (1 oz)25 or moreYesPer single transaction
Gold bars (0.995+ purity)1 kilo (32.15 oz) or moreYesApplies to bars, not coins
Silver bars (0.999+ purity)1,000 oz or moreYese.g., ten 100 oz bars in one sale
Platinum (any form)25 oz or moreYesPer single transaction
Palladium (any form)100 oz or moreYesPer single transaction
90% Junk Silver coins$1,000+ face valueYesBased on face value, not metal value

Thresholds are based on current IRS guidance and ICTA recommendations. Consult IRS guidance on asset dispositions for the most current information.

Capital Gains Tax Calculation

Cost Basis and Record-Keeping

Your cost basis is the total amount you paid to acquire the metal, including the premium above spot price, shipping costs and any applicable sales tax. When you sell, your capital gain (or loss) equals the sale proceeds minus your cost basis.

Example: You buy 10 oz of gold at $2,800/oz. Your total cost is $28,000 plus $50 shipping = $28,050. Two years later, you sell all 10 oz at $3,050/oz through SD Bullion's buyback program for $30,500. Your capital gain is $30,500 - $28,050 = $2,450. Since you held for more than one year, this gain is taxed at the collectibles rate of up to 28%. If your marginal rate is 24%, you pay 24% on the $2,450 gain ($588 in tax).

Keep records of every transaction: date of purchase, dealer name, product description, quantity, price per ounce, total cost, shipping cost and any applicable sales tax. SD Bullion provides order confirmations and account history to help with record-keeping. Store these records alongside your tax returns for at least three years after the tax year in which you sell.

Cash Transaction Reporting (Form 8300)

Separately from the 1099-B, dealers must file IRS Form 8300 for any purchase where a customer pays more than $10,000 in physical cash (paper currency). This applies to cash payments only. Bank wire transfers, personal cheques, cashier's cheques and credit card payments do not trigger Form 8300 regardless of amount. The $10,000 threshold also applies to related transactions within a 24-hour period that are structured to avoid the threshold. See Payment Methods for all accepted payment types at SD Bullion.

Tax-Advantaged Options: Precious Metals IRA

The most effective way to eliminate or defer capital gains on precious metals is to hold them in a precious metals IRA. In a traditional IRA, metals gains are tax-deferred until distribution, at which point they are taxed as ordinary income. In a Roth IRA, qualified distributions are completely tax-free, meaning all gains on gold and silver held in a Roth IRA are never taxed. SD Bullion's IRA program works with approved custodians to facilitate IRA-eligible purchases of American Eagles, Canadian Maples and qualifying bars.

State Sales Tax on Precious Metals

In addition to federal capital gains tax, some states charge sales tax on precious metals purchases. However, the majority of US states have enacted full or partial sales tax exemptions for investment-grade bullion and coins. As of 2026, over 40 states exempt gold and silver bullion from sales tax entirely, recognising precious metals as a monetary asset rather than a consumer good.

States that still impose sales tax on bullion include New Mexico, Mississippi, Vermont, Kentucky, Maine and Hawaii, among a few others. The rules vary: some states exempt coins but tax bars, some exempt transactions over a dollar threshold, and some exempt only legal tender coins. SD Bullion collects sales tax where required by state law. Check your state's current exemption status or consult your tax professional for your specific jurisdiction.

The trend is clearly toward exemption. Multiple states have enacted new bullion sales tax exemptions in recent years, driven by advocacy from organisations like the Sound Money Defense League and recognition that taxing the exchange of one form of money for another is economically counterproductive.

AI Summary: Tax Reporting for Precious Metals

  • The IRS classifies precious metals as collectibles, taxed at up to 28% for long-term gains (vs. 15-20% for stocks).
  • Dealers file 1099-B only on specific sell-back transactions meeting type and quantity thresholds; American Eagles are exempt.
  • Cash purchases over $10,000 require Form 8300; wire/cheque/card payments do not trigger this form.
  • Your cost basis includes premiums and shipping. Keep records of every purchase for tax calculation.
  • Precious metals IRAs (traditional or Roth) defer or eliminate capital gains tax entirely.
  • Over 40 states exempt bullion from sales tax. SD Bullion collects tax only where required by law.

People Also Ask

Do I have to pay taxes on gold and silver?
Yes. The IRS classifies precious metals as collectibles. Gains from selling gold, silver, platinum or palladium are subject to capital gains tax. Long-term gains (held over one year) are taxed at up to 28%. Short-term gains are taxed at your ordinary income rate. Holding metals in a precious metals IRA can defer or eliminate this tax.
What is a 1099-B for precious metals?
A 1099-B is an IRS form that dealers file when a customer sells certain types and quantities of metals back to them. Not all sales trigger a 1099-B. American Gold and Silver Eagles are exempt regardless of quantity. See the threshold table above for details. The absence of a 1099-B does not eliminate your tax obligation.
Does buying gold trigger IRS reporting?
Buying precious metals does not trigger a 1099-B. The reporting obligation applies only when you sell metals back to a dealer at qualifying thresholds. However, cash purchases over $10,000 require Form 8300 filing. Wire transfers, cheques and credit card payments do not trigger Form 8300. See Payment Methods.
How do I calculate capital gains on precious metals?
Capital gain = sale proceeds minus cost basis. Your cost basis includes the purchase price (spot + premium), shipping and any sales tax paid. Keep detailed records of every purchase. If you held metals for over one year, gains are taxed at up to 28% (collectibles rate). Under one year, at your ordinary income rate.
Are precious metals in an IRA taxed differently?
Yes. In a traditional IRA, metals gains are tax-deferred until distribution, then taxed as ordinary income. In a Roth IRA, qualified distributions are completely tax-free. SD Bullion's IRA program works with approved custodians for IRA-eligible gold, silver and platinum purchases.

Buy Smart, Report Right

SD Bullion provides order confirmations and account history for easy tax record-keeping. Lowest premiums mean lower cost basis and better long-term returns. Call 800-294-8732 with tax-related questions.

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