Do I have to pay taxes when buying gold and silver?

Many of the questions that we receive through our Contact Us page are tax-related. Our clients are financially-minded individuals who analyze important decisions in a way that others do not; this is what makes them successful. Tax consequences are crucial and the Internal Revenue Service (IRS) classifies each type of investment differently. Things like interest, dividends and capital gains/losses are vital with stocks, bonds and interest-bearing accounts, but what are the tax implications of a gold transaction?

One of the common myths about gold is that it is not subject to capital gains taxes. This is NOT true. The IRS calls for a 28 percent capital gains rate on investments in precious metals to be paid in the same tax year as the sale of said metals. National gold and silver dealers are NOT required to file an IRS report when a client buys OR sells gold but local in-state shops may be required to report transactions. It is the investor’s responsibility to report any tax gains.

The 28 percent gains rate is much higher rate than those of other investments, and some people believe that this is an attempt to deter private citizens from buying gold. The more expensive tax designation applies to the following products:

  • rare gold and silver coins
  • gold and silver bullion,
  • ETF stocks
  • gold certificates
  • gold pool accounts
  • gold stored overseas

*Gold mining stocks are subject to standard SEC tax rules.

Gold dealers are required to report the sale of gold stored within IRA accounts but retirement account holders can take delivery of that gold and then sell it privately. It should also be noted that due to the Patriot Act gold dealers must report suspicious customer activity such as declaring intent to avoid taxes or requesting false invoicing.

GoldSilver.org is not a tax advisory service and it is highly advisable to consult a tax professional before undertaking any transaction that may have tax implications. Understanding how a gold transactions works can help and you can request a free copy of Real Money Magazine below to get a better grasp of the gold and silver markets. You can also Contact Us or call us at 1-800-394-3337 today.

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