Instead, sales of physical gold or silver need to be reported on Schedule D of Form 1040 on your tax return. 3 Depending on the type of metal you are selling, Form 1099-B must be submitted to the IRS at the time of the sale, as such sales are considered income.

What is the easiest precious metal to sell?

Gold and Silver Bullion in Bars, Coins, or Ingots The form of metal is usually of high purity, as this makes it easier to sell gold and other metals later. For gold, this is 24 karats, also known as gold bullion.

Do you have to pay taxes on precious metals?

The reason: The U.S. Internal Revenue Service (IRS) categorizes gold and other precious metals as “collectibles” which are taxed at a 28% long-term capital gains rate. Gains on most other assets held for more than a year are subject to the 15% or 20% long-term capital gains rates.

What kind of tax do you pay on precious metals?

Holdings in precious metals such as gold, silver or platinum are considered to be capital assets, and therefore capital gains may apply. When it comes to tax purposes, the IRS classifies precious metals as collectibles, and thus they may potentially be taxed at the maximum collectable capital gains rate of 28 percent.

Do you have to consider capital gains when selling precious metals?

While you have to consider capital gains when selling your precious metals, there is a particular benefit when it comes to these alternative investments.

How is the cost of a precious metal determined?

The common method to determine the amount you’ll owe in capital gains tax is tied to the “cost basis” of your precious metals: the price-per-ounce for which the precious metal was purchased. While purchases tend to be one of the more common scenarios, the scenario of receiving your precious metal as a gift or inheritance also applies.

Which is the best precious metal to buy?

Bullion coins, such as Gold American Eagles, are the best type of precious metals for most investors. This is because sovereign coins are easily recognizable, easy to trade, and generally sell at higher premiums than bars.