Capital Gains Tax on Precious Metals: What U.S. Investors Need to Know
This article explains general U.S. federal tax rules as they apply to physical precious metals. It is not tax advice. Tax law is complex, changes over time, and depends on individual circumstances -- consult a qualified tax professional before making decisions based on this information.
Physical gold, silver, platinum, and palladium are not taxed like stocks when you sell them at a profit. The IRS classifies precious metals -- bullion coins, bullion bars, and rare or collectible coins alike -- as collectibles under Internal Revenue Code Section 408(m), and collectibles carry their own capital gains rules that are less favorable than the rules for most other investments.
The 28% maximum rate
Under the Taxpayer Relief Act of 1997, the maximum long-term capital gains rate on most investments -- stocks, most bonds, real estate held over a year -- was cut to 20%. Collectibles were deliberately left out of that cut. Long-term gains (metal held more than one year before selling) on physical precious metals are taxed at your ordinary marginal tax rate, up to a maximum of 28% -- well above the 15% or 20% top rates that apply to long-term stock gains for most investors.
If your ordinary marginal rate is below 28%, that lower rate applies instead -- the 28% figure is a ceiling, not a flat rate everyone pays. Short-term gains (metal held one year or less) are taxed as ordinary income either way, the same as short-term gains on any other asset.
What counts as a "collectible" here
The collectibles designation is broad. It applies regardless of form -- bullion coins like American Gold Eagles or Canadian Silver Maple Leafs, bullion bars, and numismatic or rare coins are all treated the same way for capital gains purposes. Many gold and silver ETFs that hold physical metal (rather than mining stocks) are taxed the same way as direct physical ownership, which surprises investors who assume an ETF wrapper changes the tax treatment -- it generally doesn't when the fund holds the metal itself.
How the gain is calculated
The taxable gain is the sale price minus your cost basis (what you originally paid, plus certain acquisition costs). Gains and losses on collectibles are also subject to specific netting rules when calculating your overall capital gains for the year, and in certain situations -- particularly where the alternative minimum tax exemption or the Section 199A deduction phases out -- the effective marginal rate on collectible gains can exceed 28%. This is genuinely complex territory; it's one of the areas where a tax professional's guidance is worth the cost.
Reporting the sale
Sales of physical precious metals are generally reported on IRS Form 8949 and carried to Schedule D of your federal return, the same forms used for other capital asset sales -- the difference is the rate applied to the gain, not the reporting mechanism itself. Keep records of your purchase price, purchase date, and any associated costs; without documented cost basis, the IRS may treat the entire sale proceeds as gain.
Precious metals held inside an IRA are different
The collectibles capital gains rules described here apply to metal held directly, outside a retirement account. Precious metals held inside a properly structured Gold IRA follow the IRA's own tax rules instead -- gains aren't taxed as they occur, and withdrawals are taxed according to whether the account is traditional or Roth. See our guide to what a Gold IRA actually is for how that structure works.
Sources: IRC Section 408(m); Taxpayer Relief Act of 1997; Investopedia, "Understanding Taxes on Gold and Silver Investments" (retrieved 2026-08-25); The Tax Adviser, "The taxation of collectibles" (thetaxadviser.com, retrieved 2026-08-25).
