What are the tax liabilities or impact for selling gold in the USA?

2018-04-20 16:35:59

What are the tax liabilities for selling gold? For example, suppose I bought an ounce of gold in 2005 at $500 and I sold it yesterday for $1,500. What kind of taxes are due on this (in the United States)? Where do I report the transaction to the IRS?

What if I bought the gold more recently - say one year ago - and realized a smaller profit like $100?

If I bought one coin a year ago and another back in 2005, then sold one of those yesterday, how do I decide which cost basis to use?

Gold is classified as a collectible so the gain rates are as follows:

Held less than one year. The capital gain is taxed at ordinary income tax rate, (up to 35%). See here.

Held more than one year. The capital gain is also taxed at ordinary income rate, but with a cap of 28%. In other words, if your marginal tax rate is 15%, the gain is taxed at 15%, not 28%. If you're rich and your marginal tax rate is 35%, then you tax the gain at 28%. See here.

So you'd report a gain of $100

  • Gold is classified as a collectible so the gain rates are as follows:

    Held less than one year. The capital gain is taxed at ordinary income tax rate, (up to 35%). See here.

    Held more than one year. The capital gain is also taxed at ordinary income rate, but with a cap of 28%. In other words, if your marginal tax rate is 15%, the gain is taxed at 15%, not 28%. If you're rich and your marginal tax rate is 35%, then you tax the gain at 28%. See here.

    So you'd report a gain of $100 or $1,000 , depending on which coin you sold.

    2018-04-20 17:58:17
  • For reporting purposes, I would treat the purchase and sale of gold like a purchase and sale of a stock. The place to do so is Schedule D. (And if it's the wrong form, but you reported it, there is might not be a penalty, whereas there is a penalty for NOT reporting.)

    The long term gain would be at capital gains rates. The short term gain would be at ordinary income rates. And if you have two coins bought at two different times, you get to choose which one to report (as long as you report the OTHER one when you sell the second coin).

    2018-04-20 18:00:52