Are American Eagle Gold Coins Taxable?
American Eagle gold coins are popular with investors looking to add precious metals to their portfolios, available in four weight options and selling at a premium over their gold content.
Augustus Saint-Gaudens’ breathtaking Walking Liberty design graces the obverse, while on the reverse there is a family of bald eagles. Coins were initially dated using Roman numerals; this practice changed when the mint switched over to Arabic numbers in 1991.
Capital Gains Taxes
Many are surprised to learn that their coin collections, whether inherited or gifted, carry with them distinct tax considerations when selling them compared to stocks, art or real estate – because unlike stocks and art the IRS views precious metals differently.
Coins are considered capital assets, making them subject to long-term capital gains taxes based on your cost basis; that is, how much it originally cost you at purchase time. To accurately ascertain this figure, keep accurate records of all purchases including fees or appraisal costs as well as transport expenses.
IRS laws also mandate dealers reporting any sales for cash payments of over $10,000, in order to monitor large cash payments and protect against money laundering. Not all coin transactions require reporting to the IRS.
Sales Taxes
American Eagle gold coins are an increasingly popular way for investors to build precious metals into their portfolios, yet many individuals remain unaware that these coins may be subject to sales tax when sold.
As with stocks in your brokerage account, precious metals have an inscribed face value, not related to numismatic value or gold content but instead related to legal tender status and therefore will have no bearing on your tax liability when selling them.
The IRS classifies American Eagle coins as collectibles, so any gains from long-term capital gains and short-term gains are taxed at your marginal rate and 28 percent respectively compared to 15 percent applicable for other investments. However, investors who store proof American Eagle coins in an IRA are eligible for lower premiums due to special rules set forth by the IRS in certain situations.
Self-Directed IRAs
Although self-directed IRAs provide access to more investments than traditional IRAs, the IRS still maintains certain restrictions regarding prohibited transactions and custodian requirements. A self-directed IRA cannot invest in collectibles or life insurance contracts and should avoid investing in real estate where you reside; additionally, all assets held within such an account must be held by a qualified custodian.
Therefore, it’s crucial that you work with a reputable dealer that specializes in precious metals. They will ensure your IRA is appropriately titled, report all sales to the IRS, store coins securely against theft and provide documentation for every transaction. Furthermore, an excellent dealer should also be transparent regarding pricing fees and shipping costs in order to minimize taxes while also preventing unintended prohibited transactions and minimize taxes; you should consult your CPA or an investment professional regarding specific IRA investment rules that could potentially apply here.
Taxes on Coins
American Eagle gold coins are an attractive, trusted, and secure investment choice that are ideal for diversifying portfolios with precious metals. Their beauty, trustworthiness, and value-retaining qualities make them easy to acquire while taking up minimal space in storage – as well as being legal tender coins backed by the full faith and credit of the United States government – make them highly sought after investments for investors looking to diversify their precious metal holdings.
These coins are considered collectibles by the IRS, meaning any profits you realize from selling them are taxed at a much lower rate compared to other investments. Short-term gains are taxed at your marginal income rate while long-term capital gains are taxed at 28 percent.
One ounce American Eagle coins typically include both the spot price of gold and a premium, or profit margin, that is added by their dealer. Premiums vary based on coin size; 1 troy ounce versions typically carry lower premiums.
Categorised in: Blog