When you sell physical gold, silver, platinum, or palladium at a profit after holding it more than a year, the IRS taxes the gain as a collectible at a maximum federal rate of 28%. That is the short answer to how the capital gains tax on precious metals works, and it is roughly double the 15% most investors pay on long-held stocks. Sell within a year and the profit is taxed at your ordinary income rate instead. High earners can owe another 3.8% on top through the net investment income tax, pushing the worst-case federal bite to 31.8%.
Why Precious Metals Get a Higher Rate Than Stocks
The tax code groups precious metals with artwork, antiques, rugs, stamps, and rare coins under a single label: collectibles. Bullion bars, rounds, and investment-grade coins like the American Gold Eagle and Canadian Maple Leaf all fall inside it.1Internal Revenue Service. Investments in Collectibles in Individually Directed Qualified Plan Accounts Under IRC Section 1(h), long-term gains on collectibles are taxed at a maximum rate of 28%.2Office of the Law Revision Counsel. 26 USC 1 – Tax Imposed
The word “maximum” matters. The 28% figure is a ceiling, not a flat rate. If your ordinary marginal rate is below 28%, you pay that lower rate on the gain instead. A single filer in the 22% bracket in 2026 (taxable income between $50,400 and $105,700) would pay 22% on a long-term gold gain, not 28%.3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Only taxpayers whose marginal bracket hits or passes 28% actually meet the cap.
For comparison, long-term gains on most other capital assets top out at 20% and can be as low as 0% depending on income:
- 0% for single filers with taxable income up to $49,450 ($98,900 married filing jointly)
- 15% for single filers with taxable income between $49,451 and $545,500 ($98,901 to $613,700 married filing jointly)
- 20% for single filers with taxable income above $545,500 ($613,700 married filing jointly)
A high-income investor selling stock at a long-term gain pays at most 20%. Sell a gold bar and the rate can reach 28%. Eight percentage points is the core penalty of the collectibles label.4Internal Revenue Service. Topic No 409, Capital Gains and Losses
Short-Term Versus Long-Term
The 28% cap only applies to metal held more than a year. Sell within a year of buying, and the gain is short-term and taxed at your ordinary income rate, which runs from 10% up to 37% in 2026 (with the top rate starting at $640,600 for singles and $768,700 for joint filers).3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
That means a fast sale can cost more than a slow one. A top-bracket earner who flips gold within a few months pays 37%; the same gain, held past the one-year mark, is capped at 28%. Waiting a year and a day locks in the collectibles ceiling instead of full ordinary treatment.
Your holding period starts the day after you acquired the metal and includes the day you sold it.4Internal Revenue Service. Topic No 409, Capital Gains and Losses
The Extra 3.8% for High Earners
The net investment income tax adds 3.8% on top of whatever capital gains rate applies, including the 28% collectibles rate. It applies when your modified adjusted gross income exceeds:
- $250,000 for married couples filing jointly
- $200,000 for single filers and heads of household
- $125,000 for married individuals filing separately
These thresholds are set by statute and don’t adjust for inflation, so more taxpayers cross them each year.5Office of the Law Revision Counsel. 26 USC 1411 – Imposition of Tax A married couple with $300,000 in modified AGI selling gold at a long-term gain could owe as much as 31.8% federally: 28% collectibles plus 3.8% NIIT. That’s the ceiling.
Figuring Your Gain
Your taxable gain is the sale price minus your adjusted cost basis. The math is easy; the inputs are where people slip.
Cost basis starts with what you paid and includes directly related acquisition costs: the dealer’s commission or markup, assay fees, and any shipping or insurance you paid when buying. Those costs reduce your gain, so hold onto receipts. If you bought the same type of metal over multiple purchases, you’ll need to identify which lot you sold, using either specific identification (you designate the coins or bars) or first-in, first-out. Specific identification gives more control but demands records that tie each sale to a particular purchase.
Inherited Metal
Metal received by inheritance gets a stepped-up basis equal to its fair market value on the date of death.6Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent If a parent bought gold at $400 an ounce and it was worth $2,500 when they died, your basis is $2,500 and you owe tax only on appreciation above that. Inherited property is automatically treated as long-term regardless of how briefly you held it.7Office of the Law Revision Counsel. 26 USC 1222 – Other Terms Relating to Capital Gains and Losses
Gifted Metal
Gifts work differently. The recipient generally takes over the donor’s original basis, which may be far below current value.8Office of the Law Revision Counsel. 26 USC 1015 – Basis of Property Acquired by Gifts and Transfers in Trust If your uncle bought silver at $5 and gave it to you when it was worth $30, your basis for figuring a gain is $5. If the fair market value at the time of the gift was lower than the donor’s basis and you later sell at a loss, the loss basis is that lower fair market value. Track down the donor’s original purchase records; it’s the most commonly missed step.
ETFs, Mining Stocks, and What Actually Counts as Gold
Not everything marketed as a gold or silver investment is taxed the same way. The structure of the holding decides the rate.
Physically-backed ETFs like SPDR Gold Shares (GLD) hold actual bullion in a vault, and shares represent a fractional interest in that metal. These funds are typically grantor trusts.9SEC.gov. SPDR ETFs – Basics of Product Structure Because the IRS treats you as a direct owner of the underlying gold, gains on those shares are taxed at the 28% collectibles rate.
ETFs that track metal prices through futures contracts or other derivatives are generally not treated as collectibles. Their tax treatment depends on the fund’s specific structure and the types of contracts it holds, and some produce a mix of short-term and long-term gains. Read the prospectus and the fund’s tax reporting before assuming a lower rate.
Mining company stocks and ETFs that hold mining shares are ordinary capital assets, taxed at the standard 0%, 15%, or 20% long-term rates. Owning shares of a gold miner is not the same as owning gold for tax purposes.
Using Losses to Cut the Bill
Long-term capital losses offset long-term capital gains, including 28% collectibles gains. If you sold stock at a loss the same year you sold gold at a gain, the stock loss reduces the gold gain dollar for dollar.4Internal Revenue Service. Topic No 409, Capital Gains and Losses If your total losses exceed your total gains, you can deduct up to $3,000 of the excess against ordinary income ($1,500 married filing separately), and any remainder carries forward indefinitely.
Precious metals have one planning advantage stock investors don’t. The federal wash sale rule, which disallows a loss if you repurchase a substantially identical asset within 30 days, applies only to stocks and securities.10Office of the Law Revision Counsel. 26 USC 1091 – Loss From Wash Sales of Stock or Securities Physical precious metals are neither. You can sell gold at a loss, buy it back immediately, and still deduct the loss.
One route that used to work no longer does. Before 2018, investors could defer tax by swapping one metal for another under Section 1031. The Tax Cuts and Jobs Act limited Section 1031 to real property.11Office of the Law Revision Counsel. 26 USC 1031 – Exchange of Real Property Held for Productive Use or Investment Every sale or exchange of precious metals is now a taxable event.
Reporting the Sale
You owe tax on every profitable sale, whether or not a dealer sends you a form. The obligation comes from the sale, not from paperwork.
Report each transaction on Form 8949, listing the date acquired, date sold, proceeds, basis, and gain or loss.12Internal Revenue Service. Instructions for Form 8949 Long-term collectibles gains go in Part II. The totals flow to Schedule D, which summarizes short-term and long-term gains and losses for the year.13Internal Revenue Service. About Form 8949, Sales and Other Dispositions of Capital Assets Schedule D directs collectibles gains to a separate 28% Rate Gain Worksheet, which calculates the tax at the correct rate before the final number lands on Form 1040.
When Dealers Report Your Sale
Dealers file Form 1099-B for certain precious metal sales, but the threshold is narrower than many sellers expect. A sale is reportable only if the metal is in a form approved for a regulated futures contract by the CFTC and the quantity sold meets or exceeds the minimum delivery amount for that contract. A single gold coin sold to a dealer wouldn’t trigger a 1099-B if the smallest CFTC-approved gold coin contract requires delivery of at least 25 coins.14Internal Revenue Service. Instructions for Form 1099-B (2026) Sales to the same dealer within 24 hours are aggregated to prevent splitting.
Separately, a dealer receiving more than $10,000 in cash in a single transaction or related transactions must file Form 8300 with the IRS.15Internal Revenue Service. About Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business That obligation sits with the dealer, but it means the IRS learns about large cash purchases.
Records
Keep purchase invoices, sales confirmations, and any documentation of basis for at least three years after filing the return that reports the sale.16Internal Revenue Service. How Long Should I Keep Records Metal is often held for decades, and proving the original purchase price twenty years later without paperwork is close to impossible, so holding records longer is wise. Failing to report a gain can bring penalties, interest, and in cases of willful evasion, criminal prosecution.
One Boundary: Retirement Accounts Follow Different Rules
The 28% collectibles rate applies to metal you hold personally, not to metal held inside a qualified retirement account. Transactions within a self-directed IRA holding IRS-approved bullion or coins don’t trigger capital gains tax at all. The tax event happens on distribution: traditional IRA withdrawals are taxed as ordinary income at your regular marginal rate, and qualifying Roth IRA distributions are generally tax-free.17Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts If your metal is in an IRA, the rules on eligible purity, custodianship, and prohibited transactions are their own topic and worth reading separately before you buy or sell.