Yes, you generally do pay taxes on gold, and the rules are less favorable than for stocks. The IRS classifies physical gold as a collectible, so long-term profits from selling it face a maximum federal capital gains rate of 28%. You may also owe state sales tax when you buy, state income tax when you sell, and an additional 3.8% federal surcharge if your income is high enough. What you actually owe depends on how you hold the gold, how long you keep it, and how you dispose of it.
Sales Tax When You Buy Gold
Buying physical gold can trigger state sales tax depending on where the sale takes place. Roughly three dozen states fully exempt investment-grade gold bullion and coins with no minimum purchase. A handful exempt bullion only when the purchase exceeds a threshold, typically in the $1,000 to $2,000 range. A few states plus the District of Columbia tax gold in full.
Exemptions often hinge on purity. Many states that exempt bullion require a minimum fineness, commonly 99.5% for gold. Numismatic coins sold primarily for their collector value rather than metal content sometimes fall outside these exemptions. If you buy from an out-of-state dealer who does not collect sales tax, your own state may still expect you to pay use tax on the purchase. Check your state’s revenue department before buying to avoid a surprise bill.
Capital Gains Tax When You Sell Gold
Selling gold at a profit creates a capital gain you must report on your federal return. The rate depends primarily on how long you held the gold.
Long-Term Gains at the 28% Collectible Rate
Gold held longer than one year qualifies for long-term capital gains treatment, but not the favorable rates that apply to stocks. Under Section 1(h) of the Internal Revenue Code, collectibles gains are taxed at a maximum rate of 28%. That is the ceiling. If your ordinary tax bracket is lower than 28%, you pay at your regular rate instead. By comparison, most long-term stock gains are capped at 15% or 20%. The collectible classification comes from Section 408(m), which includes “any metal or gem,” and Section 1(h)(5)(A) explicitly treats gold coins and bullion as collectibles for income tax purposes.1Office of the Law Revision Counsel. 26 USC 1 – Tax Imposed
Short-Term Gains at Ordinary Rates
Gold sold within one year of purchase produces a short-term capital gain taxed at your ordinary income rate.2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Even at lower brackets, short-term rates often exceed 28%, so selling gold quickly tends to cost more in taxes than holding it past the one-year mark.
Figuring the Gain
Your taxable gain is the sale price minus your cost basis. Cost basis includes everything you paid to acquire the gold: the purchase price, dealer premiums, commissions, and shipping. If you bought the same type of gold at different times and prices, you will need to identify which specific lot you sold. Detailed records from the start make this much easier at tax time.
The 3.8% Net Investment Income Tax
High earners face an added 3.8% surtax on top of the capital gains rate. Under Section 1411, this Net Investment Income Tax applies to gains from selling property, including collectibles like gold, when your modified adjusted gross income exceeds $200,000 for single filers or $250,000 for married couples filing jointly.3Office of the Law Revision Counsel. 26 USC 1411 – Imposition of Tax These thresholds are set by statute and are not adjusted for inflation, so more taxpayers cross them each year.
For a high-income investor, that means a combined federal rate of 31.8% on long-term collectible gains: the 28% collectible rate plus the 3.8% surcharge. On short-term sales, the effective rate can climb higher because the NIIT stacks on top of ordinary income rates.4Internal Revenue Service. Net Investment Income Tax
State Income Tax on Gold Profits
Federal taxes are not the whole picture. Most states tax capital gains as ordinary income, adding anywhere from roughly 2% to over 13% on top of your federal bill. A few states impose no income tax at all, which means no state-level tax on gold profits. One state taxes only capital gains above $250,000. The combined federal and state bite on a gold sale can easily exceed 35% for residents of high-tax states.
Gold ETFs and Mining Stocks
Holding gold through the stock market does not automatically give you better tax rates. The treatment depends on what the fund actually owns.
Physically Backed Gold ETFs
The most popular gold exchange-traded funds, including SPDR Gold Shares (GLD) and iShares Gold Trust (IAU), are structured as grantor trusts that hold physical gold bullion. Because the IRS looks through the trust to the underlying asset, your shares are treated as an investment in a collectible. Long-term gains are taxed at the same 28% maximum, and short-term gains at ordinary rates.5SPDR Gold Shares. Grantor Trust Tax Reporting Statement Investors who assume ETF shares get the lower stock rates are often surprised at tax time.
Gold Mining Stocks and Diversified Funds
Shares in gold mining companies and mutual funds that invest in mining equities are treated as regular stock. Long-term gains qualify for the standard 0%, 15%, or 20% rates depending on your income.6Internal Revenue Service. Topic No. 409, Capital Gains and Losses The difference matters: $50,000 in long-term gains from a mining stock at 15% costs $7,500, while the same gain from a physically backed gold ETF at 28% costs $14,000.
Gold Held in an IRA
You can hold physical gold inside a self-directed IRA, but the rules are strict. Buying or selling gold inside the IRA does not trigger any immediate tax. The tax event comes at distribution.
What Gold Qualifies
The IRS generally treats metals in an IRA as collectibles, which would make the purchase a taxable distribution. There is a carve-out for gold bullion that meets the minimum fineness required by regulated commodity exchanges (99.5% for gold) and for certain U.S. gold coins minted under federal law. A bank or IRS-approved nonbank trustee must hold physical possession of the metal. Storing IRA gold at home or in a personal safe deposit box, even through an LLC owned by the IRA, violates these rules.7Internal Revenue Service. Investments in Collectibles in Individually Directed Qualified Plan Accounts
How Distributions Are Taxed
When you take distributions from a traditional gold IRA, the money is taxed as ordinary income at your marginal rate, just like distributions of cash or stock from any other traditional IRA. The 28% collectible rate does not apply to IRA distributions. If you withdraw before age 59½, a 10% early distribution penalty also applies on top of income taxes.8Internal Revenue Service. Retirement Plans FAQs Regarding IRAs Roth IRA distributions are tax-free if the account has been open for at least five years and you have reached 59½.
The Wash Sale Exception for Physical Gold
Physical gold owners actually catch a break here. The federal wash sale rule, which prevents stock investors from claiming a loss if they repurchase substantially identical shares within 30 days, applies only to stock and securities under Section 1091.9Office of the Law Revision Counsel. 26 USC 1091 – Loss From Wash Sales of Stock or Securities Physical gold, silver, and other precious metals are not stock or securities.
You can sell gold bullion at a loss, claim the tax deduction, and buy the same type of gold back the next day without the IRS disallowing the loss. Physically backed gold ETFs structured as grantor trusts occupy a gray area, so the safer route for this strategy is actual bullion.
Inherited and Gifted Gold
How you acquired the gold changes what you owe when you sell it.
Inherited Gold
Gold you inherit gets a stepped-up basis equal to its fair market value on the date the previous owner died. If a parent bought gold for $500 an ounce and it was worth $2,500 an ounce at death, your cost basis is $2,500. You owe capital gains tax only on any increase above that stepped-up amount.10Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent That step-up can erase decades of unrealized gains in a single stroke.
Gifted Gold
Gold received as a gift carries over the donor’s original cost basis. If someone paid $800 an ounce and gives you the gold when it is worth $2,500, your basis for calculating a gain is still $800, and the full appreciation is taxable when you sell.11Internal Revenue Service. Property (Basis, Sale of Home, Etc.) If the market value at the time of the gift was lower than the donor’s basis, different rules apply for calculating a loss, which can create a no-gain, no-loss zone where neither is recognized.
Reporting Your Gold Transactions
Even when a dealer files no paperwork, you are still legally required to report gains and losses.
Dealer Reporting on Form 1099-B
Gold dealers must file Form 1099-B with the IRS when customers sell certain types of bullion and coins in reportable quantities. For gold bars, the threshold is a sale totaling 100 troy ounces or more, whether in a single 100-ounce bar or in 1-kilogram bars (32.15 troy ounces each). For widely traded coins such as Krugerrands, Canadian Maple Leafs, and Mexican Onzas, a sale of more than 25 coins triggers a report. American Gold Eagle coins are not on the reportable list regardless of quantity.
Cash Payments and Form 8300
If you pay for gold with more than $10,000 in cash in a single transaction or related transactions, the dealer must file Form 8300 with the IRS.12Internal Revenue Service. Form 8300 and Reporting Cash Payments of Over $10,000 It is a reporting requirement on the dealer, not an additional tax, but it creates a paper trail the IRS can match against your return.
Form 8949 and Schedule D
You report each gold sale on Form 8949, listing the description, dates of purchase and sale, cost basis, and proceeds. Totals flow onto Schedule D of your Form 1040.13Internal Revenue Service. About Form 8949, Sales and Other Dispositions of Capital Assets Most tax software handles the transfer automatically. If you received a 1099-B, double-check that the cost basis shown matches your records, since dealers do not always have your original purchase price.
Gold Stored Abroad
Storing physical gold overseas brings additional reporting. If your specified foreign financial assets exceed certain thresholds, you must file Form 8938 with your return. For U.S. residents filing single, the reporting kicks in when total foreign asset value exceeds $50,000 on the last day of the tax year or $75,000 at any point during the year. Married couples filing jointly face thresholds of $100,000 and $150,000. Taxpayers living abroad have significantly higher thresholds.14Internal Revenue Service. Summary of FATCA Reporting for U.S. Taxpayers
Missing a Form 8938 filing triggers a $10,000 penalty, with additional $10,000 penalties every 30 days after IRS notice, up to a $50,000 maximum.15Internal Revenue Service. International Information Reporting Penalties Physical gold in a foreign vault generally must be reported on Form 8938 but is not reported on the FBAR (FinCEN Form 114), which applies only to foreign financial accounts with aggregate balances exceeding $10,000.16Internal Revenue Service. Report of Foreign Bank and Financial Accounts (FBAR)