The tax on gold is heavier than the tax on most other investments. The IRS treats physical gold as a collectible, so long-term gains face a federal ceiling of 28% instead of the 20% cap that applies to stocks and bonds. Add the 3.8% net investment income tax for higher earners and the effective top rate reaches 31.8%. What you actually pay depends on the form your gold takes, how long you held it, and whether it sits inside a retirement account.
Selling Physical Gold at a Profit
Sell physical gold, bars, or coins at a profit after holding them longer than a year and the gain is taxed at the collectibles capital gains rate. The 28% maximum is set under IRC Section 1(h), which creates a separate rate bracket for gains on collectibles as defined in IRC Section 408(m).1Office of the Law Revision Counsel. 26 U.S. Code 1 – Tax Imposed The 28% is a ceiling, not a flat rate. If your taxable income puts you in a bracket below 28%, you pay the lower rate on the gain instead.
Sell within a year of buying and the profit is a short-term capital gain taxed as ordinary income. For 2026, ordinary rates run from 10% to 37%.2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 A quick flip on gold can cost more in tax than a patient hold, depending on your income.
On top of either rate, the 3.8% net investment income tax applies if your modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly). That surtax is what pushes the top federal rate on long-term physical gold gains to 31.8%. It doesn’t appear on Schedule D; it’s calculated separately on Form 8960, which is where it catches people off guard.
Your holding period runs from the day after you acquired the gold through the day you sold it. Cost basis includes what you paid plus transaction fees rolled into the purchase, so keep receipts.
Using Losses (and the Wash Sale Advantage)
Gold losses offset gold gains, and net capital losses can offset gains in other categories. If total losses exceed gains for the year, you can deduct up to $3,000 of the excess against ordinary income ($1,500 if married filing separately) and carry the rest forward.3Internal Revenue Service. Topic No. 409, Capital Gains and Losses
Physical gold has one real edge over stocks: the wash sale rule doesn’t apply. That rule normally blocks a loss deduction if you buy back a “substantially identical” security within 30 days on either side of the sale. Physical gold and other precious metals are not securities, so you can sell at a loss, claim the deduction, and buy the same metal back the next day.
How Gold ETFs and Mining Stocks Are Taxed
The collectibles rate only reaches physical gold and funds that hold it directly. Gold mining stocks and mutual funds that invest in mining companies follow ordinary stock tax rules. Hold shares longer than a year and long-term gains are taxed at 0%, 15%, or 20% depending on income.2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Qualified dividends get the preferential rate. Sell inside a year and it’s ordinary income.
Physically Backed Gold ETFs
Gold ETFs structured as grantor trusts that hold actual bullion are treated as if you owned the metal itself. Selling shares triggers the 28% collectibles ceiling on long-term gains. You get exchange-traded convenience with the same tax hit as bars in a vault. The structure matters more than the ticker, so check the prospectus or tax supplement before buying.
Futures-Based Gold ETFs
Some gold ETFs use futures contracts rather than bullion. These may fall under the Section 1256 mark-to-market rules, which treat the contracts as sold at fair market value on the last day of the tax year whether or not the position closed.4Internal Revenue Service. Form 6781 – Gains and Losses From Section 1256 Contracts and Straddles Gains and losses are then split 60% long-term and 40% short-term regardless of holding period. That 60/40 blend produces a lower maximum effective rate than 28%, which is part of why some investors prefer futures-based exposure.
Holding Gold Inside an IRA
A self-directed IRA is the main legal way to shelter gold from the collectibles rate. Gold in a traditional IRA grows tax-deferred; gold in a Roth IRA can grow tax-free if you meet the withdrawal rules.5CBS News. What Is the IRS Loophole for Gold? Either way, the 28% rate never touches the account while the gold stays inside.
The IRS is strict about what qualifies and how it’s stored:
- Bullion must be at least 99.5% fine. The American Gold Eagle is the major exception, permitted by statute at 91.67% purity.
- Approved coins include the American Eagle, American Buffalo, Canadian Maple Leaf, Austrian Philharmonic, and Australian Kangaroo.
- IRA gold has to be held by an IRS-approved custodian at an approved depository. Home storage and personal safe deposit boxes are not allowed.
- You can’t move gold you already own into the IRA. All metals must be purchased through the custodian after the account is open.
Distributions from a traditional gold IRA are taxed as ordinary income at your marginal rate, not at the collectibles rate. Withdrawals before age 59½ trigger both income tax and a 10% penalty, and required minimum distributions apply as they do with any traditional IRA. If the custodian distributes physical gold to satisfy an RMD, the fair market value of that metal counts as taxable income for the year.6CBS News. Gold IRA Rules and Taxes: Withdrawals, Penalties and Common Mistakes to Avoid Qualified Roth withdrawals come out tax-free.
Inherited vs. Gifted Gold
Gold you inherit gets a stepped-up basis equal to the fair market value on the date of death. If a parent bought gold at $500 an ounce and it was worth $2,500 when they died, your basis is $2,500 and decades of appreciation are never taxed.7Internal Revenue Service. Gifts and Inheritances If the executor elected the alternate valuation date (six months after death), that date sets your basis. Only gain above the stepped-up figure is taxed when you sell, and it’s taxed at the collectibles rate.
Gold received as a gift is less favorable. Your basis is generally the donor’s original cost, so you inherit their unrealized gain. If the fair market value at the time of the gift was lower than the donor’s basis, you use fair market value for calculating a loss but the donor’s basis for calculating a gain. If the donor paid gift tax, you may be able to add a portion of it to your basis.8Internal Revenue Service. Property (Basis, Sale of Home, Etc.) For families planning a transfer, inheriting is far more tax-efficient than gifting during life.
Sales Tax on Gold Purchases
Gold is not automatically exempt from state sales tax, though many states exempt bullion, bars, and qualifying coins, sometimes with conditions like a minimum purchase amount or a legal-tender requirement. Rules vary widely; check your state’s Department of Revenue before buying locally.
Ordering from an out-of-state dealer doesn’t necessarily dodge the tax. Most states impose a use tax at the same rate as their sales tax when taxable goods purchased elsewhere are brought into the state. If your state taxes gold and the online dealer doesn’t collect, you owe the use tax yourself.
What You Have to Report to the IRS
Every gold sale that produces a gain or loss goes on your return, regardless of size. Report the transaction on Form 8949 and carry the totals to Schedule D of Form 1040.9Internal Revenue Service. Instructions for Schedule D (Form 1040) For collectibles, enter code “C” in column (f) of Form 8949 to flag the gain for the 28% treatment.10Internal Revenue Service. Instructions for Form 8949 This obligation exists whether or not your dealer sends you a tax form.
When the Dealer Sends a 1099-B
Dealers file Form 1099-B for certain precious metals sales, but the trigger is narrower than most people assume. Reporting is required only when the metal is in a form for which the Commodity Futures Trading Commission has approved a regulated futures contract and the quantity meets or exceeds the minimum delivery quantity for that contract.11Internal Revenue Service. Instructions for Form 1099-B (2026) Sales to a single customer within 24 hours are aggregated when applying the threshold.12Internal Revenue Service. Correction to the 2025 and 2026 Instructions for Form 1099-B, Page 5, Under Sales of Precious Metals The absence of a 1099-B doesn’t mean the sale is tax-free. You still owe the gain on Schedule D, and skipping the report because no form arrived is one of the most common mistakes in precious metals investing.
Cash Payments Over $10,000 (Form 8300)
Pay for gold with more than $10,000 in cash or cash equivalents in a single transaction (or in related transactions) and the dealer must file Form 8300 with the IRS and FinCEN.13Internal Revenue Service. Form 8300 and Reporting Cash Payments of Over $10,000 Cash equivalents can include cashier’s checks, money orders, and traveler’s checks with a face value of $10,000 or less in certain transactions. Separate purchases within a 24-hour period from the same buyer are combined for the threshold.14Internal Revenue Service. IRS Form 8300 Reference Guide Form 8300 is an anti-money-laundering requirement, not a tax on the purchase, but structuring transactions to stay under $10,000 on purpose is itself a federal crime.
Gold Stored Abroad
Storing gold in a foreign vault can create federal reporting duties independent of any sale. Physical gold you hold directly in another country is generally not a “financial account” for FBAR purposes. If a foreign institution holds gold on your behalf as an agent or bailee with the ability to dispose of it for you, that arrangement can be a reportable financial account.15Internal Revenue Service. Report of Foreign Bank and Financial Accounts (FBAR) If your reportable foreign financial accounts exceed $10,000 in aggregate at any point during the year, file FinCEN Form 114 by April 15, with an automatic extension to October 15.
FATCA reporting on Form 8938 is separate. For single filers living in the U.S., it applies when specified foreign financial assets exceed $50,000 on the last day of the year or $75,000 at any point during the year. For joint filers, the thresholds are $100,000 and $150,000. Taxpayers living abroad have significantly higher thresholds.16Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets
Penalties make this worth taking seriously. Non-willful FBAR violations carry a civil penalty of up to $16,536 per account per year (the 2026 inflation-adjusted figure). Willful violations run to the greater of $100,000 or 50% of the account balance, plus potential criminal exposure. A reasonable-cause exception exists when the failure was unintentional and the account was properly reported elsewhere, but that is a hard argument to make after the fact.