Capital Gains Tax on Gold and Silver: What You’ll Actually Owe in 2026

Most new precious metals buyers are surprised to learn how gold and silver are taxed when they sell. The IRS does not treat physical bullion like stocks. It treats them like collectibles — the same category as art, antiques, and rare coins — which means a different (and higher) maximum federal tax rate, different reporting rules, and a separate maze of state sales tax exemptions to navigate at the time of purchase.

Here's exactly how it works in 2026.

The 28% Collectibles Rate

Under IRC Section 408(m), gold, silver, platinum, and palladium bullion are classified as collectibles for federal tax purposes. Long-term capital gains on collectibles are taxed at a maximum federal rate of 28%, compared to 0%, 15%, or 20% for stocks and other capital assets depending on income.

The 28% rate is a maximum, not a flat rate. If your ordinary income tax rate would be lower than 28%, you pay your ordinary rate on the gain. Most taxpayers in the 22% or 24% bracket end up paying their bracket rate on collectibles gains. Taxpayers in the 32%, 35%, or 37% brackets cap out at 28%.

This is one of the few areas of the tax code where high-income earners get a slightly better treatment than the headline rate suggests.

Short-Term vs. Long-Term

The collectibles rate only applies to long-term gains — metal held for more than one year. If you buy gold in March and sell it in October of the same year, the gain is short-term and taxed at your full ordinary income rate, just like a stock held under 12 months.

For most precious metals buyers, this isn't a major concern because the typical holding period is years or decades. But for buyers who trade more actively — rotating between metals, taking profits during price spikes — the holding period rule matters and is worth tracking carefully.

Calculating Cost Basis

Your gain is the sale price minus your cost basis. Cost basis includes:

• The original purchase price (what you paid the dealer, including the premium over spot)
• Sales tax paid at the time of purchase, if any
• Shipping and insurance costs paid at purchase
• Storage fees, in some interpretations — the IRS treatment is mixed; consult a tax professional

Keep every purchase receipt. The single most common mistake precious metals owners make at tax time is being unable to prove cost basis because they bought coins years ago in cash and never kept records. Without documentation, the IRS can treat your entire sale proceeds as gain.

1099-B Reporting Rules

Dealers are required to file Form 1099-B with the IRS reporting precious metals purchases from individuals when the transaction meets specific thresholds set by the IRS. The reportable items are based on IRS guidance on broker reporting and historical industry practice tied to delivery quantities. The most commonly cited reportable transactions include:

• Sales of 25 or more 1 oz gold Maple Leafs, Krugerrands, or Mexican Onzas
• Sales of 1 kilogram or more of gold bars (or any aggregate equivalent)
• Sales of 1,000 troy ounces or more of silver bars or rounds
• Sales of 90% silver U.S. coins with a face value of $1,000 or more
• Sales of 25 or more 1 oz platinum or palladium coins

Notably absent from the reportable list are American Gold Eagles, American Silver Eagles, and American Buffalos in any quantity. This is a quirk of how the rules were originally written and has not changed. Selling 100 American Silver Eagles to a dealer typically does not trigger 1099-B reporting; selling 1,000 ounces of generic silver rounds typically does.

Important: the absence of 1099-B reporting does not mean the gain is tax-free. You are still legally required to report and pay tax on every taxable gain, regardless of whether the dealer files a 1099-B. The reporting rules govern what the dealer tells the IRS, not what you owe.

State Sales Tax at Purchase

Sales tax on precious metals purchases is governed by state law and varies dramatically. Many states exempt investment-grade bullion entirely. Some exempt purchases over a certain dollar threshold (often $1,000 or $1,500). A few states tax all precious metal purchases at the full sales tax rate.

States that fully exempt investment-grade bullion (as of 2026) include Texas, Florida, Arizona, Washington, Oregon, Nevada, Wyoming, Alaska, Delaware, New Hampshire, Montana, and many others. States that historically tax precious metals at full rate include New Jersey, Vermont, Hawaii, Wisconsin, and several others. State legislatures change these rules frequently — a state that taxed bullion in 2020 may have exempted it by 2026 or vice versa.

Online dealers must collect sales tax based on the buyer's state of delivery. This means buying online from an out-of-state dealer does not avoid sales tax in a state that taxes bullion — the dealer is required to collect and remit it. Always verify the sales tax treatment in your state before making large purchases. The Industry Council for Tangible Assets and individual state tax authority websites are the most reliable sources.

Selling at a Loss

If you sell precious metals for less than your cost basis, the loss is generally deductible against other capital gains. Collectible losses follow standard capital loss rules: net them against capital gains first, then deduct up to $3,000 of net losses against ordinary income per year, and carry forward any excess.

There is no special “collectibles loss” rate — losses are losses. The 28% rate only applies on the gains side.

IRA Tax Treatment Is Different

Gold and silver held inside a properly structured precious metals IRA are not taxed as collectibles. Inside an IRA, the metals follow standard IRA tax rules: contributions may be tax-deductible (traditional IRA), gains grow tax-deferred, and distributions are taxed as ordinary income at retirement. Roth IRA precious metals grow tax-free if all rules are followed.

This tax-deferred treatment is one of the legitimate arguments for using an IRA structure for long-term metal holdings — though the annual custodial and storage fees common in precious metals IRAs eat into the benefit, particularly on smaller accounts. Run the math before assuming the IRA wrapper is automatically the better choice.

Inheriting Gold and Silver

Inherited precious metals receive a stepped-up basis under current federal law. The cost basis becomes the fair market value on the date of the original owner's death, not the price they originally paid. This means heirs who sell soon after inheriting often owe little or no capital gains tax, even on metals held in the family for decades.

If you inherit gold or silver, document the date-of-death value (a written appraisal from a reputable dealer is the standard practice) and keep that record permanently. It establishes your cost basis for any future sale and can save substantial tax if the metal appreciates further before you sell.

The 1031 Exchange Loophole That No Longer Exists

Before the Tax Cuts and Jobs Act of 2017, precious metals could potentially be swapped tax-free under Section 1031 like-kind exchange rules. Some owners used this to rotate between gold and silver without triggering taxable events. The 2017 law restricted Section 1031 to real estate only, eliminating this option for precious metals.

Any swap of gold for silver, silver for gold, bullion for coins, or coin for coin is now a taxable event measured in dollars. Plan accordingly.

The Practical Guidance

For most retail precious metals buyers, the practical takeaways are:

• Keep every purchase receipt forever — or at least scan and store them digitally
• Hold for more than one year to qualify for the long-term collectibles rate
• Verify your state's sales tax treatment before large purchases
• Don't assume the absence of a 1099-B means the gain isn't taxable — it always is
• If you inherit metals, document the date-of-death value immediately
• For complex situations or large gains, consult a CPA familiar with collectibles taxation

Precious metals have favorable long-term wealth preservation characteristics, but they are not a tax shelter. Every major sale triggers a reportable event, and the rules are different enough from stocks and bonds that surprises at tax time are common for new buyers. A few hours spent understanding the rules is the cheapest insurance available.

GoldSilverSelect.com is an independent directory of local and online precious metals dealers. We are not a tax advisor, and this article is for educational purposes only. Tax laws change and individual situations vary significantly. Consult a qualified CPA or tax attorney before making decisions based on this information.