Gold Fell Below ,000. Can You Harvest a Bullion Loss Before Dec. 31?

For the first time in a while, a lot of gold owners are holding metal worth less than they paid. On October 30, 2026, gold closed at $3,984.94 an ounce on The Gold Window's daily spot series. On that same series, the 2026 high was $5,405 on January 29, so the October 30 close sits roughly 26% below it. Anyone who bought this year is likely under water on paper, before counting the dealer premium they paid.

That raises a year-end question stock investors know well: can you sell at a loss before December 31, deduct it, and buy back in? This article walks through what the Internal Revenue Code and current IRS publications actually say about bullion losses, why the wash-sale rule is written in a way that doesn't name physical metal, where that answer gets less certain (ETFs especially), and why dealer spreads can eat much of the benefit.

It is general education, not tax advice. The rules below are from the statute and the 2025 editions of IRS Publications 550 and 544, the current editions as of November 2026. Run your own numbers with a tax professional before you sell.

Step one: is your loss deductible at all?

An individual can deduct only certain kinds of losses. Under 26 U.S.C. § 165(c), those are losses incurred in a trade or business, losses in a transaction entered into for profit, and casualty and theft losses within narrow limits. IRS Publication 544 puts the flip side plainly: a "loss from the sale or exchange of property held for personal use is not deductible."

• Bullion bought as an investment (coins and bars you hold for their metal value) is generally a transaction entered into for profit, so a loss on sale is a capital loss.
• Gold jewelry you wore, or a coin collection that was mainly a hobby, can look more like personal-use property. A gain on that property is still taxable, but a loss is not deductible. If your situation is mixed, raise it with your preparer before you count on the deduction.

Step two: how much of the loss you can use

Capital losses first offset capital gains. Under 26 U.S.C. § 1211(b), if your losses exceed your gains, you can deduct the excess against other income up to $3,000 a year ($1,500 if married filing separately).

Anything left over isn't lost. Under 26 U.S.C. § 1212(b), an individual's net capital loss carries forward to the next year, keeping its short-term or long-term character, and keeps carrying forward until it's used. Publication 544's example: a couple with a $7,000 capital loss and no other capital transactions deducts $3,000 this year and carries the rest forward.

The collectibles wrinkle: where a bullion loss lands

Gold, silver, platinum and palladium are "collectibles" for capital-gains purposes. 26 U.S.C. § 1(h)(5) defines collectibles gain and loss by reference to the collectibles list in § 408(m), applied without the IRA bullion exception in § 408(m)(3). Publication 550 describes it as gain or loss from selling "metal (such as gold, silver, and platinum bullion)" held more than one year. Long-term collectibles gain is taxed at a maximum 28% rate rather than the 0/15/20% rates that apply to most long-term gains.

How the loss side works matters for harvesting:

• Long-term bullion losses (metal held more than a year) are collectibles losses. Under § 1(h)(4), the "28-percent rate gain" is collectibles gain minus collectibles loss, net short-term capital loss, and any long-term loss carried forward from earlier years. In plain terms, a long-term loss on gold first reduces your long-term collectibles gains.
• Short-term bullion losses (held one year or less) are ordinary short-term capital losses. Most metal bought in 2026 falls here. They offset short-term gains first, and a net short-term loss also reduces 28% rate gain.
• The 28% is a ceiling. Publication 550 notes that if your regular rate is lower than 28%, the 28% rate doesn't apply. The value of a loss depends on which gains it ends up offsetting and on your bracket.

The calculation runs through the 28% Rate Gain Worksheet in the Schedule D instructions. For the gain side of the same rules, see our capital gains tax guide for gold and silver.

The wash-sale rule and physical metal

The wash-sale rule is what stops a stock investor from selling at a loss and buying the same shares straight back. Its text is narrow. 26 U.S.C. § 1091(a) disallows a loss "from any sale or other disposition of shares of stock or securities" if, within 30 days before or after the sale, the taxpayer acquires (or contracts or takes an option to acquire) "substantially identical stock or securities." The statute extends "stock or securities" to contracts or options to buy or sell stock or securities. It doesn't mention commodities or precious metals.

A gold coin or a silver bar isn't a share of stock or a security. By its terms, then, § 1091 doesn't reach a sale of physical bullion.

IRS Publication 550 describes the rule the same way. Its wash-sale section speaks only of "stock or securities" and contracts or options on them, and it adds that the wash-sale rules "do not apply to losses from sales or trades of commodity futures contracts and foreign currencies." As of November 2026, neither Publication 550 nor the Schedule D instructions mention physical precious metals in their wash-sale discussions.

What that does and doesn't mean:

• It isn't an IRS ruling on bullion. It's the statute's wording, plus publications that don't extend it. Congress or Treasury could change the scope, and you should check the current rule in the year you file.
• A sale still has to be a real sale. Selling coins and buying identical coins back from the same dealer in the same moment, with no real change in your position, invites the question of whether anything happened at all. General tax principles about substance over form exist apart from § 1091. A tax professional can tell you how much separation, in time or in product, makes sense for your facts.
• The holding period restarts. Because no wash-sale adjustment applies, the replacement metal gets a new cost basis and a new holding period. Sell it within a year and any gain is short-term, taxed at ordinary rates.
• Lower basis, larger future gain. Harvesting a loss and rebuying lowers your basis by the same amount. Part of the benefit is timing: tax saved now can come back as a larger gain later.

ETFs, mining stocks and other paper gold

This is where the answer gets less clean.

• Physically backed metal ETFs. Many are organized as grantor trusts, and § 1(h)(5)(B) treats gain from selling an interest in a trust, to the extent it reflects appreciation in collectibles, as collectibles gain. Publication 550 says the same. But ETF shares are bought and sold on an exchange like stock, and as of November 2026 Publication 550 doesn't say whether trust shares backed by metal are "stock or securities" for § 1091. Without that answer, a conservative approach treats a sale and repurchase of the same ETF within 30 days as a possible wash sale. A swap into a different fund that holds the same metal raises the separate "substantially identical" question. Ask your preparer before relying on either. Our physical silver vs. ETF guide covers the structural differences.
• Mining stocks are stock. The wash-sale rule applies to them in full.
• IRAs. Publication 550 lists buying substantially identical stock or securities in your IRA or Roth IRA within the 30-day window as a wash sale. Keep that in mind if you hold metal ETFs inside an IRA.
• Futures. Publication 550 says the wash-sale rules don't apply to commodity futures contracts. Futures have their own tax regime, outside the scope of this article.

Timing: what "before December 31" means

For securities traded on an established market, including ETF shares, Publication 550 is specific: the trade date controls, not the settlement date. Its example is stock sold on December 31, 2025 that settled in January 2026. The gain or loss belongs on the 2025 return.

A sale of coins or bars to a dealer isn't an exchange trade, and IRS publications don't set out a separate trade-date rule for it. Many dealers quote a locked price by phone and pay only after your metal arrives and is checked. To keep the question from arising, finish the sale well before year-end: lock the price, deliver the metal, and get a dated confirmation and invoice that show the date, the products, and the price. Holiday shipping and dealer processing can take longer than usual in late December.

Do the round-trip math first

A tax loss is worth a fraction of its size. Selling and rebuying physical metal costs real money: you sell at the dealer's bid and buy back at its ask, and the gap between them is often several percent. See what dealers actually pay on sell-back and how much over spot to pay.

Consider a hypothetical buyer, using round numbers rather than any dealer's actual quotes. She paid $5,200 for a one-ounce gold coin in early 2026. A dealer now bids $3,950 for it, giving her a $1,250 short-term capital loss. She has no other capital gains this year, so the loss offsets ordinary income within the $3,000 limit. In a 24% bracket, that saves about $300 in federal tax. If buying a replacement coin and the sale together cost her 4% of the metal's value, about $158, her net benefit is roughly $142. She has also lowered her basis, so more of any future rise in gold will be taxable. With a wider spread, a lower bracket, or a smaller loss, the trade can cost more than it saves.

Harvesting can make more sense when the loss is large, when it offsets gains you have already realized this year, or when you were planning to sell anyway. It makes less sense for a small loss in a low bracket.

Reporting the sale

• Report every sale on Form 8949 and Schedule D, whether or not the dealer issues a Form 1099-B. Many bullion sales are not reportable by the dealer, but they are still reportable by you. See our explainer on the 2026 Form 1099-B instructions for precious metals.
• Prove your basis. A loss is only as good as your records. Keep the original invoice (price, premium, shipping) and the sale confirmation. Gifted or inherited metal has its own basis rules. See gifting gold and silver and inheriting gold and silver.
• Watch state tax. State income tax treatment of capital losses varies. Check your state's rules, too.

Year-end checklist

• Confirm the metal was held as an investment, not for personal use.
• Find your purchase invoices and work out the actual loss, including the premium you paid.
• Note the holding period of each lot: one year or less, or more than one year.
• Get two or three bids, and compare the tax value of the loss with the round-trip cost.
• For ETFs, mining stocks, or anything in an IRA, plan around the 30-day window or get advice first.
• Complete the sale, with dated paperwork, well before December 31.

Whether to sell, hold or rebuy is a personal decision this article doesn't make for you. For the market side of that question, see our buy, sell or hold framework. To compare local buyers, browse our dealer directory.

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. Consult a qualified CPA or tax attorney before making decisions based on this information.