Taxes on Buying and Selling Gold?

Hi, I just wonder what are the tax rates on buying and selling gold? It seems there is no tax on buying gold with certain online vendors, but there is a very high tax rate on "collectibles" if you sell them. I'd like to confirm this with the experts here. Thank you!

 

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You really should talk to someone in your state can can give you some reliable professional advice. State tax laws vary widely, and Federal capital gains issues can get complicated very quickly. This is one of those times when a pro's fees are a good investment.

 

This has been debated on CoinTalk in the past. Some folks claim that gains are taxed at the capital gains rate of 15%. Others claim that gains are taxed at the collectible rate of 28%. I think 28% is the correct answer based on my reading of the tax code, but I'm not a tax professional, so consult your own advisor.

 

Don't short-term and long-term capital gains apply to precious metals?

 

Yes they are considered captial gains, but there is a special 28% capital gains tax rate on collectibles, which most reputable tax folks, including the IRS, believe to be the proper category for bullion sales.

 

Yes, after reading IRS publications, I see that it is quite clearly stated that bullion is considered a collectible and taxed at the 28% rate. I learn something new every day (well, almost every day).

 

Thanks for all the replies and the information! Now that we have established that we must pay A LOT OF taxes when selling gold, here are some small but maybe also important details I'd like to clarify -

1. Consider a hypothetical situation: I bought a gold bullion at $1000, and after a while I sold it for $1200 and made $200 in profits. So, shall I report the tax on the $1200 gross income or on the $200 profits only? Also, how does inflation factor into the calculation?

2. How is this tax reporting enforced? Does the buyer (local dealer or pawn shop and the like) report your selling to IRS, or is it entirely up to you? And do you have to keep all the buying and selling paperwork for tax reporting?

Thank you all!

 

I would take your net proceeds (sale price minus any commissions) and subtract the cost basis ($1000) to get the taxable amount. Thus, $200 would be taxable.

I'm not sure how much is done in reporting your transactions to the IRS. But when it comes to keeping records, of course you need to keep all your records as backup in case you are audited.

 

I learned another tid bit. If your total income only puts you into say a 15% tax bracket, then that is all you will need to pay on your bullion capital gains. So you can get around the 28% rate by reducing your income

 

You only owe capital GAINS taxes on your GAIN. So you would only owe taxes on the $200 profit (which you can reduce by your selling expenses). If you don't have your receipts from purchase to establish your cost basis, the government may just assume your basis is zero and tax you on the full amount realized. So save your receipts in case you need them.

 

At all the coin shows I attend I see many transactions for gold coins being carried out in cash and no receipt. The only time I've gotten a receipt at a coin show is when I request one. I always pay cash.

Capital gains on gold coins I guess depends on how they are bought/sold.

 

Don't report anything. Make all the money you can. Then, apply to be Treasury Secretary, or basically any position in Washington. (just make sure it's somewhat high profile)

Pretend it was an honest mistake, get slapped on the wrist and pay $20 in fees and voila!!!

 

". . . Then, apply to be Treasury Secretary, or basically any position in Washington. (just make sure it's somewhat high profile). . ."

Yes, that is now the norm. In Baltimore the mayor was convicted of extorting gift cards(the new paper bag full of cash) from contractors. She was sentenced to community service, fine, and probation before verdict. At no time did I hear she violated the public trust. She gets to keep her $83K pension. $83K x thirty years for a thief. Yes, the political landscape has changed.

​

 

That is so pathetic. We are teaching our future generations NOTHING!

I am so disgusted!!!

What happened? Do you go inside some secret building when you become a career politician and they inject alien blood into you? Apparently they all belong to some secret group (oh yeah, the gov't) and learn how to be professional "do as I say, not as I do" BS'ers...

 

I think the system corrupts those who are willing to be corrupted. Some are probably just thieves and go into to office so they can steal even more. . I wonder how the honest ones get by every day.

 

I think this is incorrect. The tax on collectibles is 28%. It doesn't matter what tax bracket you are in. But check this with your tax preparer.

 

from:misc.taxes.moderated newsgroup

Tax on Bullion Gold Sales?

on Jan 7, 4:27 pm, "Sam" <sasdfa...@lkuy.com> wrote:

> Hi, say somebody buys ten gold coins for a total of $10,000.00 then a year
> later sells them for $12,000.00. How does the sale get reported for
> Federal tax purposes?

It is a capital gain, reported on Schedule D, and taxed at the
collectible rate of 28% if long term, but lower if your marginal tax
rate is lower.

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Back in California where iam from originally, Purchase,s of Gold are taxed
On the amount of gold you purchase, Anything over $1,000 is non-taxed
Anything under is taxed at the current rate of 9.34% this goes for any type
Of Gold!!

 

I believe that the $1,000 limit in California was raised to $1,500 in 2009.
As far as capital gains, I believe that that refers to items held more than 1 year. If you flip your 2009 UHR (or 100 oz bar - gold silver or plastic) for a profit, you would be taxed at your marginal rate.

 

I have to wonder if the items sold for a gain were stored physically by you if a write-off is in order on the gains for storage fees, handling fees, and so on, like any business would claim. After all, to properly store them I had to pay for electricity, a mortgage and so on. I could probably turn a $2000 gain into a $2000 loss.
Guy~