Selling physical gold or silver at a profit can create a taxable capital gain. The tax is calculated on the gain, not on the amount you receive.
That second sentence is where most of the confusion lives. Someone who sells $40,000 of coins does not owe tax on $40,000. They owe tax on whatever that $40,000 exceeded their cost, and if there was no gain there may be no tax at all.
Before going further, it is worth separating three different taxes that get tangled together under the same search. This article is about the first one.
- Capital gains tax on a sale: federal tax on the profit when you sell metal for more than it cost you. This is the subject below.
- State sales or use tax on a purchase: charged by some states when you buy bullion, not when you sell it. Rules vary considerably by state and by product.
- Jewelry: taxed differently in practice from investment bullion, because valuation and cost basis work differently. Melt value is not the same thing as what a piece sold for.
The short answer
| Question | Answer |
|---|---|
| What is the taxable event? | Selling or exchanging the metal, not owning it |
| What is taxed? | The gain: sale proceeds minus your basis |
| Held one year or less? | Short-term gain, taxed as ordinary income |
| Held more than one year? | Long-term collectibles gain, taxed at your ordinary rate up to a maximum of 28% |
| Sold at a loss? | No gain to tax; capital loss rules may apply |
| Inherited the metal? | Different basis rules entirely |
| Metal held inside an IRA? | Different treatment entirely |
Why 28% is a ceiling, not a rate
The single most repeated claim about this topic is also the most misleading. You will read that gold is “taxed at 28%.” That is not what the rule says.
The IRS treats physical gold, silver, and platinum bullion as collectibles. Its guidance on capital gains, Topic no. 409, states that “net capital gains from selling collectibles (such as coins or art) are taxed at a maximum 28% rate.”
A maximum is a cap. If your ordinary marginal rate is below 28%, the collectibles rule does not raise it to 28%. What it does is prevent a long-term collectibles gain from receiving the lower 0%, 15%, or 20% treatment that applies to net capital gains on assets like stocks.
So a seller in a lower bracket may pay well under 28%, and a seller in a high bracket pays 28% on the long-term portion rather than their full marginal rate.
Short-term gains, on metal held one year or less, are a separate matter. They are taxed as ordinary income at your marginal rate, which can be higher than 28%.
Some higher-income taxpayers may also owe the separate net investment income tax, which depends on overall income rather than on gold alone. That is one reason the final tax bill is specific to the seller. Orion Metal Exchange does not offer tax advice; consult your tax advisor regarding your individual circumstances.
How the gain is actually calculated
Two numbers matter: what you received, and your basis. Basis is generally what you paid, including certain acquisition costs.
| Situation | The numbers | What is taxed |
|---|---|---|
| A long-term gain | Ten one-ounce coins bought in 2019 at $1,850 each, a basis of $18,500. Sold in 2026 for $40,000 | The $21,500 gain, at your ordinary rate up to the 28% ceiling, because you held them more than a year |
| Why proceeds are not gain | $40,000 of coins that cost you $39,000 | The $1,000 gain. Not the $40,000, which is the figure that feels alarming |
| A loss | Bought at a high point, sold for less than you paid | Nothing. Loss rules may let it offset other capital gains, subject to the usual limits. Raise it with your tax preparer rather than assuming |
| Inherited metal | Basis is generally fair market value at the date of death, not what the deceased paid | Only the gain above that date-of-death value, which is often small and sometimes nil |
Inherited metal has mechanics of its own, including the problem of evidencing that date-of-death value and what changes when the metal sat inside a retirement account. Those are covered in our guide to leaving gold and silver to your heirs.
The IRS publications that set out the general framework are Publication 544 on sales and dispositions of assets and Publication 550 on investment income, which is where collectibles gains are addressed.
What about metal held in a Gold IRA?
Different structure, different rules, and this section is deliberately short because the two situations have little in common.
Buying and selling metal that stays properly inside an IRA is not the same as selling your own coins and banking the cash. Transactions inside the account are governed by the retirement account rules rather than by the capital gains rules discussed above.
What matters for tax purposes is generally the distribution: when money or metal comes out of the account, and whether the account is traditional or Roth.
Traditional accounts grow on a tax-deferred basis and distributions are handled under the IRA rules. Roth accounts are funded with after-tax dollars and follow different distribution rules. Required minimum distributions generally begin at age 73 for traditional accounts, and meeting one from an account holding coins means either selling metal or taking a distribution in kind.
For the account side of this, see our precious metals IRA page and our overview of physical precious metal ownership in a tax-deferred account. Anything involving your own distributions belongs with your tax advisor.
What gets reported, and to whom
This is the question people actually type into search boxes, usually phrased as some version of “how does the IRS know?”
Three things are worth understanding, and one thing is worth not guessing at.
- Dealers report certain sales, not all of them. Whether a transaction triggers a dealer information report depends on the specific product and the nature of the transaction, and the rules are technical. You will find articles that hand you a tidy list of reportable coins and quantities. This one deliberately does not, because those tables circulate for years after the underlying detail has changed.
- Form 1099-B reports proceeds. Where a report is required, Form 1099-B is the mechanism, and it reports what you received rather than what you gained. A 1099-B showing $40,000 is not a statement that you made $40,000.
- Separate rules cover large cash payments. Payments made in cash above a threshold carry their own reporting requirements, independent of anything specific to metals.
- The form does not determine the tax. Receiving a 1099-B does not create a tax liability, and not receiving one does not remove it. Whether a gain is taxable depends on whether there was a gain.
Reporting obligations and tax obligations are two different systems. That is worth holding on to, because it is where most of the worry on this subject comes from.
If you want the current detail on which transactions require a dealer report, take it from the IRS instructions for the form rather than from a blog, and confirm your own position with a tax professional.
What to keep, starting now
Most of the difficulty people have with this tax is not the rate. It is that they cannot prove what they paid. Basis is your responsibility to substantiate, and the burden lands years later, often on an heir.
- Original invoices. The single most valuable document. Keep the one showing the product, quantity, and total.
- Purchase price and date. Per lot, not as a lump sum, because holding periods and gains are calculated lot by lot.
- Product description. Exact coin or bar, weight, and fineness. “Some gold coins” is not a record.
- Storage and shipping documentation where those costs formed part of your acquisition cost.
- Valuation documents for inherited metal , establishing fair market value at the date of death.
- Sale confirmations and any 1099-B you receive.
If your records are already incomplete, that is a conversation to have with a tax professional rather than a reason to avoid selling. There are recognized approaches to substantiating basis, and guessing on a return is not one of them.
Before you sell, know both sides of the transaction
Once the tax question is answered, a second question remains, and it is the one that determines how much you actually walk away with: what the metal is worth on a real bid today.
Those are separate things. The tax depends on your basis and your circumstances. The proceeds depend on what a dealer will pay. A favorable tax position on a poor price is not a good outcome.
Orion Metal Exchange offers clients an exclusive commission-free buyback policy. We have offered to buy back the metals we have sold to our clients since inception, clients liquidate at no charge and receive what the market is rendering at the time, and a buyback price can be guaranteed on a short phone call.
If you hold the metal yourself, we arrange an insured courier collection; if it sits in an IRA or third-party storage, we work with your custodian and depository. Proceeds are forwarded once the metal is received, and payment processing generally takes four to seven business days.
If you want the mechanics of running a sale well, including pricing, timing, and documentation, that is covered in our guide on how to sell gold coins.
And to be explicit about the boundary: Orion does not calculate, advise on, or take responsibility for your tax liability. That is work for a qualified tax professional who knows your full picture.
The information provided on this website is for informational purposes only and does not constitute financial, investment, or trading advice. The content on this site is not intended to be a recommendation to buy, sell, or hold any precious metals, financial instruments, or other products mentioned.
Investing in gold, silver, or any other precious metals involves risk, and it is important to conduct your own research and consult with a licensed financial advisor before making any investment decisions. The value of precious metals can fluctuate significantly, and past performance is not indicative of future results.
The website owners, authors, and contributors do not guarantee the accuracy, completeness, or reliability of any information presented. Any reliance you place on such information is strictly at your own risk.
Tax on Selling Gold and Silver FAQs
How much tax do I pay if I sell gold?
It depends on your gain, how long you held the metal, and your income. Held more than a year, the gain is long-term collectibles gain taxed at your ordinary rate up to a maximum of 28%. Held a year or less, it is taxed as ordinary income. If you sold for no more than you paid, there is no gain to tax.
Is gold really taxed at 28%?
28% is a ceiling on long-term collectibles gains, not a flat rate everyone pays. If your marginal rate is below 28%, the collectibles rule does not raise it. What the rule does is prevent long-term gains on bullion from qualifying for the lower 0%, 15%, and 20% rates that apply to assets such as stocks.
Do I pay tax on the full sale amount or just the profit?
Just the gain. Sale proceeds minus your basis. Getting this backwards produces a far larger estimate of what you owe than the real figure, which is why keeping your original invoices matters so much.
How does the IRS know if I sell gold?
Certain transactions require the dealer to file an information report, and where one is required Form 1099-B reports the proceeds. Whether a specific sale is reportable depends on the product and the transaction. Note that the reporting question and the tax question are separate: a gain is taxable whether or not a form was issued.
What if I do not have the receipts for metal I bought years ago?
Then substantiating basis becomes the problem to solve, because without it the proceeds are the only figure on record. Talk to a tax professional about acceptable ways to establish basis in your situation. Do not guess a number on a return.
Do I owe tax on inherited gold that I sell?
Possibly, but usually far less than people expect, because inherited property generally takes a basis equal to fair market value at the date of death rather than what the deceased paid. That often means only the appreciation since the date of death is taxable. Our guide on leaving gold and silver to your heirs covers this and the documentation an heir needs.
Does selling silver work the same way as gold?
Yes in structure. Silver bullion is treated as a collectible on the same basis, with the same holding period distinction and the same 28% ceiling on long-term gains. The arithmetic is identical; only the numbers differ.
Is there a legal way to reduce the tax on a sale?
There are ordinary tax planning considerations rather than tricks: your holding period, accurate basis records, whether capital losses elsewhere can offset the gain, and which tax year the sale falls in. All of them depend on your specific circumstances, which is exactly why this belongs with a qualified tax professional rather than a general article.
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Disclaimer
The information provided on this website is for informational purposes only and does not constitute financial, investment, tax, legal, or trading advice. The content is not intended as a recommendation to buy, sell, or hold any precious metals, financial instruments, or other products mentioned.
Investing in gold, silver, and other precious metals involves risk. The value of precious metals can fluctuate significantly, and past performance is not indicative of future results. Readers should conduct their own research and consult with a licensed financial advisor and qualified tax professional before making investment or tax-related decisions.
The website owners, authors, and contributors do not guarantee the accuracy, completeness, timeliness, or reliability of the information presented. Any reliance placed on this information is strictly at the reader’s own risk.
