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Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →Clear out junk files and repair common Windows errorsFree Scan →For a U.S. individual investor, selling physical gold or silver usually creates a capital gain or loss: your taxable result is generally the amount realized minus your adjusted basis. The holding period then determines whether the result is short-term or long-term. Bullion and coins held for more than one year fall under the collectibles rules, where the maximum rate on net collectibles gain is 28%—not a 28% tax on everything you received.
Tax when you buy is a separate question. State and local sales or use tax depends on your location, the metal product and the transaction, so no nationwide purchase-tax answer is accurate. This guide covers the federal income-tax framework for investment bullion and coins, the records and forms normally used, and the situations that require additional advice.
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What tax applies when you sell investment gold or silver?
The Internal Revenue Service generally treats gold, silver, platinum, bullion and coins as capital assets when an investor holds them for investment. A sale therefore normally produces a capital gain or capital loss rather than ordinary business income. The important exception is dealer inventory: metal held for sale to customers is a different tax situation from metal held as an investment.
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Capital gain or loss = amount realized − adjusted basis
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The IRS describes the rule this way: “When you sell a capital asset, the difference between the adjusted basis in the asset and the amount you realized from the sale is a capital gain or a capital loss.” Your result is not automatically the cash amount shown on a dealer statement. You must establish what the metal cost you and how the transaction was reported.
Investment holdings versus dealer inventory
- Investor-held bullion or coins: generally capital assets, with gain or loss calculated under capital-gain rules.
- Dealer inventory: property held for sale in a trade or business; it is not treated the same way as an ordinary investment holding.
- Other arrangements: financial products, retirement accounts, gifts, inherited property, futures and business-use property can involve separate rules that are outside this overview.
Do not assume that swapping metal for another asset is tax-free. An exchange can be a disposition, and its tax treatment must be checked under the rules that apply to the specific property and transaction.
How to calculate your taxable gain or loss
1. Establish your adjusted basis
Basis normally starts with what you paid. IRS Topic 703 states: “In most situations, the basis of an asset is its cost to you.” For a metal purchase, cost generally includes the purchase price, sales tax charged on the purchase and other expenses connected with acquiring the asset.
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Keep the documentation that supports every component of basis:
- Dealer invoices identifying the product, quantity and purchase date
- Payment records, including bank, card or wire confirmations
- Sales tax shown on the purchase invoice
- Shipping, insurance or transaction charges connected with the purchase
- Dealer account statements and any serial-number or lot information
If you bought the same type of metal in multiple transactions, do not casually assign a cost to the lot you sold. The sources summarized here do not prescribe a particular lot-identification method for every fact pattern. Use current IRS rules and obtain qualified tax advice when records are incomplete or the identity of the lots is disputed.
2. Determine the amount realized
The amount realized is the value you receive in the disposition. Use the final sale documentation, not an online spot-price quote. A dealer’s statement, settlement record or other closing document should show what was paid for the specific coins or bars. Reconcile that document to your own records and to any information return you receive.
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3. Subtract basis from the amount realized
For example, suppose an investor paid $20,000 for bullion, $150 in sales tax and $50 in purchase-related charges. The adjusted basis is $20,200. If the investor later sells the bullion for $25,000, the illustrative gain is $4,800 ($25,000 − $20,200). The $4,800 gain—not the full $25,000 proceeds—is the starting point for the tax computation.
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If the same basis were followed by a $18,000 sale, the illustrative loss would be $2,200. Whether and how that loss affects the taxpayer’s overall return depends on the complete capital-gain and capital-loss computation and the current-year IRS instructions.
Why the holding period changes the tax treatment
The IRS generally treats a holding period of one year or less as short-term and a holding period of more than one year as long-term. The period is generally counted from the day after acquisition through the disposition date. The acquisition and sale dates on your records therefore matter.
| Holding period | General federal treatment | What determines the final result |
|---|---|---|
| One year or less | Short-term capital gain or loss; short-term gains are taxed at ordinary graduated rates. | Your taxable income, filing situation, other gains and losses, and the applicable tax-year rules. |
| More than one year | Long-term capital gain or loss. Gold, silver and platinum bullion and coins are included in the collectibles rules for the 28% rate calculation. | The net capital-gain computation, your income and losses, and the applicable tax-year rules. |
What “maximum 28%” actually means
IRS Topic 409 says: “Net capital gains from selling collectibles (such as coins or art) are taxed at a maximum 28% rate.” Publication 550 identifies gold, silver or platinum bullion and coins held for more than one year among the collectibles covered by this framework.
That wording has three important limits:
- It is a maximum rate, not a flat charge. It does not mean you multiply gross sale proceeds by 28%.
- It applies to net capital gain in the collectibles calculation. Your gains, losses and other income affect the result.
- It is year-specific. The ordinary capital-gain brackets and income thresholds used in the calculation can change. Use the IRS guidance for the tax year of the sale rather than an old rate table.
A long-term gain may therefore be subject to a rate below the 28% ceiling, depending on the taxpayer’s circumstances. A short-term gain does not receive the long-term collectibles treatment; it is generally included with ordinary-rate income.
Which IRS forms normally report a metal sale?
Form 8949 and Schedule D
The IRS directs taxpayers to report most capital transactions on Form 8949 and summarize them on Schedule D, subject to the forms’ current instructions and exceptions. Form 8949 is where transaction-level details such as dates, proceeds and basis are generally reconciled. Schedule D carries the resulting totals into the broader capital-gain and capital-loss calculation.
Prepare the return from your own purchase and sale records. A form may contain incomplete or differently stated basis information, especially when assets were acquired years earlier or through multiple transactions.
Form 1099-B is information reporting, not a tax bill
Form 1099-B applies to specified broker and barter-exchange transactions. Receiving one does not establish that the reported proceeds equal your taxable gain, and not receiving one does not make a taxable sale disappear. Compare any 1099-B with invoices, settlement records and your basis schedule, then follow the current Form 8949 and Schedule D instructions.
The IRS Form 1099-B information page notes a correction dated January 30, 2026, to the 2025 and 2026 instructions under “Sales of precious metals.” Because instructions can change, check the version that applies to the tax year of your transaction. The available guidance does not establish a universal precious-metals reporting threshold, so do not rely on an internet threshold that is not supported by the current IRS instructions.
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What records should you keep?
Good records are the practical difference between a defensible calculation and an estimated one. Retain the documents long enough to support the return under applicable record-retention rules, and preserve them in a format you can retrieve if a lot is sold years later.
- At purchase: date, dealer, product description, quantity, price, sales tax and every connected acquisition charge.
- During ownership: storage or account records that identify the property, plus any transfers between accounts or locations.
- At sale: date, quantity, product identification, gross proceeds, charges shown by the dealer and the final settlement statement.
- For multiple lots: a running schedule that ties each sale to the purchase records used for its basis.
- For tax filing: copies of Forms 8949, Schedule D, any 1099-B and the worksheets used to reconcile them.
Do not overwrite original invoices when correcting a spreadsheet. Keep the original document and make an auditable note explaining the correction.
Buying gold or silver: sales tax is a separate question
Federal income tax on a later sale is not the same as sales or use tax charged when you buy. State and local rules may differ by jurisdiction and by product. A state may treat bullion, numismatic coins, jewelry, premiums, shipping or transaction charges differently, and exemptions can have conditions or minimums.
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There is no reliable nationwide answer to “Do I pay sales tax when I buy gold?” without at least the buyer’s state, the delivery location, the product type and the transaction details. Check the current department of revenue guidance for that jurisdiction or ask a tax professional before treating a purchase as exempt. Keep any sales tax paid because it can be part of the federal basis calculation.
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Calling the 28% rule a flat gold tax
Mistake: saying every gold or silver sale is taxed at 28%.
Fix: describe the rule as a maximum 28% rate for net long-term collectibles gain. Compute gain from proceeds minus adjusted basis and apply the current-year capital-gain computation.
Taxing the gross check instead of the gain
Mistake: multiplying the dealer’s payment by a tax rate.
Fix: reconstruct basis from the original cost, purchase sales tax and connected acquisition expenses, then subtract it from the amount realized.
Assuming a 1099-B decides the return
Mistake: treating the form as the tax bill, or assuming no form means no reporting.
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Fix: reconcile the information return to your own records and report the disposition under the current Form 8949 and Schedule D instructions.
Using the wrong holding period
Mistake: counting the purchase date as day one without checking the IRS convention, or treating exactly one year as long-term.
Fix: document the acquisition and disposition dates. More than one year is generally long-term; one year or less is generally short-term.
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Mistake: applying another state’s bullion exemption to your own purchase.
Fix: verify the current rule where the buyer takes delivery, for the exact product and charges on the invoice.
When professional advice is especially valuable
Consider qualified tax advice when you have incomplete purchase records, many lots, a disputed basis, a large gain or loss, a dealer business, an exchange rather than a cash sale, or property held in a retirement account, trust or business. Those facts can change which rules apply or what documentation is required.
This overview addresses U.S. federal treatment for individuals holding physical metals as investments. Tax rates, forms and state rules change, so use the current IRS publications and form instructions for the year of sale and obtain advice tailored to your facts when the amounts or records are significant.
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