Are Gold and Silver Coins Taxable?
GoldSilver only sells bullion coins that are exempt from Capital Gains Tax, unlike their numismatic counterparts which are valued based on face value alone. Our inventory of such bullion coins reflects this difference.
Dealers are required to file a 1099-B form with the IRS when selling certain precious metals to customers, in order to help prevent instances of tax evasion and avoidance. This helps the government track transactions better.
The IRS considers physical gold and silver coins collectibles, like art or antiques, so any profits realized from selling these items are subject to capital gains tax, which tends to be higher than with investments like stocks or real estate.
Collectible investments can provide an attractive source of passive income, but be wary when purchasing items as their value may decrease rapidly and cause your returns to decline dramatically.
Your local and state sales taxes may also apply when buying collectibles, for instance some states levy additional charges on rare coins that possess greater numismatic value than their precious metal content.
However, there are exceptions to this rule; specifically the IRS does not impose sales tax on government-issued coins that qualify as legal tender such as gold Sovereigns or silver Britannias.
Capital Gains Tax
If a coin or bullion piece increases in value and is sold, any profits are subject to capital gains tax; unlike paper assets which may be subject to ordinary income rates depending on how much profit was made and your marginal tax bracket.
Gold and silver coins held within a Self Invested Personal Pension (SIPP) are exempt from CGT, including Sovereigns issued after 1837, Britannia coins, limited issue Royal Mint pieces that qualify as legal tender, etc.
However, sales tax rules vary from state to state and may impose an investment-grade bullion sales levy while others do not. Therefore it is advisable to check your local laws and consult a financial advisor if purchasing and selling physical bullion regularly in order to gain specific advice tailored specifically for your circumstances that can help minimize tax liabilities associated with silver purchases or sales.
Many see investing in precious metals as a reliable and passive form of income, providing a stable yet safe haven against market volatility and economic instability. But taxing gold and silver would inhibit this beneficial form of investing activity – thus cutting into vital state revenue streams.
The IRS classifies gold bullion bars and coins as collectibles similar to art or antiques, so any profits made when selling these assets at a profit must be declared as taxable gains. Your total sales price minus your original cost basis (which could include storage and holding costs) determines this figure.
Physical precious metal investments differ from exchange-traded funds (ETFs) in that when sold they must be reported to the IRS via Form 1099-B and 8300. Furthermore, any cash payments of $10,000 or more received must also be reported so as to assist the IRS with monitoring large commodity exchanges and prevent money laundering schemes.
Although many bullion coin buyers and sellers assume Uncle Sam is trying to oversee their hobby, he really only cares about your money flow – hence the arbitrary rules regarding reporting and use by hard sell telemarketers to promote lower premium bullion products.
No matter the circumstances surrounding your situation, it is advisable to speak to an investment professional experienced with precious metals to understand exactly what steps need to be taken in order to meet tax obligations.
As a general rule, gold coins must be reported to the IRS when sold for over $28 an ounce; however, there are exceptions; for example if you purchased 10 Krugerrands at once and later sold them off as separate transactions for 20 each it would fall under the 24-hour rule and counted as one sale.
Categorised in: Blog