As a savvy investor, you know tax planning can significantly impact your overall returns. So, you might be wondering how to sell gold and silver tax-free.
Working within IRS regulations and tax laws, you can’t avoid the tax on selling gold and silver altogether. However, you can deploy several methods to minimize your tax liability when offering your gold and silver for sale. Here are some guidelines on how to sell gold and silver tax-free.
Understanding Precious Metals and Taxes
Precious metals are rare, metallic elements that maintain a high economic value. Eight elements are classified as precious metals: gold, silver, platinum, palladium, iridium, osmium, rhodium and ruthenium. Because of their resistance to rusting or corroding, precious metals are used in many applications, including jewelry, industry and investing.
Gold and silver are the most popular precious metals, with gold being the metal of choice for most investors, followed by silver. While gold and silver can be great for diversifying your investment portfolio, they also have tax implications.
Some states require you to pay sales tax when buying gold and silver. While you pay no federal sales tax on gold and silver, you will be subject to capital gains taxes when selling silver and gold for a profit. Your state may also charge a capital-gains tax.
The IRS considers precious metals collectibles, and the standard tax on selling gold or silver for a profit is 28%. That’s the capital gains tax you’ll pay if you hold your precious metal investment longer than a year before selling it for a profit. If you keep your gold or silver for a year or less, any profit from selling your precious metal will be taxed at your marginal rate, which ranges from 10% for the lowest earners to 37% for the highest earners.
Ways to Sell Gold and Silver Tax-Free
You can’t legally avoid paying taxes on the profits from selling your gold or silver. However, there are ways to minimize the impact of taxes from selling your precious metals.
Tax Exemptions Under Specific Conditions
The question of whether you pay capital gains tax doesn’t have a direct yes or no answer. Under certain scenarios, you won’t pay a capital-gains tax for selling your silver and gold.
For instance, if you sell your silver or gold for a loss – say, you bought the precious metal at $1,000 and sold it for $900 – you won’t be taxed on the sale. You can use the loss to offset other gains on collectibles. American Eagles and other legal tender are also not taxed as a capital gain when sold.
Utilizing Tax-Advantaged Accounts
Precious metal individual retirement accounts, known as gold IRAs, work similarly to traditional IRAs but hold physical precious metal bars and coins instead of paper assets. Just as with a conventional IRA, gains in a gold IRA are not taxed until distribution, which is taxed as ordinary income.
The Role of Gifting and Inheritance
You won’t be taxed if you give your gold or silver to someone as a gift up to the IRS exemption. The annual gift tax exemption for 2024 was $18,000 per gift. It is $19,000 for 2025. For the recipient, the basis – or its original value – is “stepped up” for tax purposes. That means the value of the gold or silver is the fair value of the precious metal when you give it, potentially saving on the recipient’s taxes.
Key Strategies for Selling Gold and Silver Tax-Free
To maximize your returns when selling silver and gold, you must understand the market. Here are the main strategies.
Timing the Market to Minimize Tax Impact
Global economics, geopolitics and supply and demand cause gold and silver prices to fluctuate. Keep your eyes on the market. If you’re in a lower tax bracket or favorable position for capital gains, consider selling during instability, when precious metal prices are likely rising.
Properly Documenting Sales and Transactions
It’s important to pay attention to every detail of the sale. Keeping detailed records of each sale – purchase and sales receipts, dates, prices and methods – can help you accurately record your gains or losses. Your documentation should also include shipping and insurance information.
Potential Pitfalls and Considerations
When you sell your gold and silver, you’re trying to minimize your taxes and maximize your returns. Consider taking the necessary precautions to avoid adding costs (by oversight or being scammed) on top of your transaction.
Risks of Misreporting or Failing to Report Sales
Precious metals dealers are obligated to report sales of bullion of a specific fineness and amount, and you are also required to report your transactions. Failing to maintain proper records or file your sale with the IRS could lead to fines, penalties and even criminal charges.
Reportable transactions require you to file Form 1099-B (Proceeds from Broker and Barter Exchange Transactions), which lists gains and losses.
For gold, transactions of bars or rounds with a purity of .995 amounting to a total sale of one kilo (32.15 ounces) must be reported. You also must report the sale of 25 or more coins: one oz. Gold Maple Leaf, one oz. Gold Krugerrand and one oz. Gold Mexican Onza.
Your transactions of silver with a fineness of .999 that total 1,000 ounces or more must be reported. You must also file a report if you sell U.S. coins that contain 90% silver and the face value of the transaction exceeds $1,000.
Scams and Illegitimate Buyers in the Market
Buying gold and silver can be easier than selling it because of scams. When you buy your gold or silver, ask for a guarantee to sell the precious metal back. This can make it easier to sell your gold or silver later.
Here are other ways to safeguard your sale. Learn the value of your gold and silver and find a reputable metals dealer. Consider reading reviews and verifying a dealer’s location. Use a secure and trackable delivery service. And trust yourself. If something smells fishy, back away from the deal.
Sell Your Gold and Silver to Maximize Your Returns
This guide has laid out what you must understand about precious metals and taxes to sell your gold and silver. Now that you know how to sell gold and silver tax-free, you can maximize your returns on your precious metal investments.
Frequently Asked Questions
How much gold can I sell without reporting to the IRS?
For bars and rounds, the requirements for reporting gold sales to the IRS are based on the purity and the total weight purchased. Each piece must have a fineness of .995, and the total weight sold must be at least a kilo (32.15 ounces). You also must report if you sell 25 or more of the following coins: one oz. Gold Maple Leaf, one oz. Krugerrand and one oz. Gold Mexican Onza.
Can I sell silver without paying taxes?
The short answer is no if you sell your silver for a profit. However, you can sell your silver at a loss to avoid paying capital gains and use the loss to offset other gains on collectibles you sell at a profit.
What is the most profitable way to sell gold?
To get the best price for your gold, consider selling it to a reputable online precious metals dealer. Online dealers often offer better prices because they have smaller margins than brick-and-mortar stores.