When you sell physical precious metals for a profit, the IRS treats that gain as a capital gain. But unlike stocks or real estate, gold and silver are classified as **collectibles** — which means a different tax rate applies.
Disclaimer: This is educational content, not tax advice. Consult a qualified tax professional for guidance specific to your situation.
The Collectibles Tax Rate
The IRS taxes long-term capital gains on collectibles — including gold, silver, platinum, and palladium — at a maximum rate of **28%**. This is higher than the 15-20% rate that applies to most other long-term investments.
- Short-term gains (assets held less than 1 year): taxed at your ordinary income rate (up to 37%)
- Long-term gains (assets held more than 1 year): taxed at up to 28% for collectibles
- If your ordinary rate is below 28% : you pay your ordinary rate, not 28%
How to Calculate Your Gain
Your taxable gain is simple: **Sale Price − Cost Basis = Capital Gain**
- Cost basis includes the purchase price plus any premiums, shipping, or fees you paid
- Sale price is the amount you receive minus any selling costs
- Net gain is what gets reported on your tax return
Tax-Efficient Strategies
- Hold for more than one year to qualify for the long-term collectibles rate rather than the higher short-term rate
- Track specific lots — if you bought gold at different times, you can choose which lot to sell (specific identification method) to optimize your tax outcome
- Offset gains with losses — losses on other investments can offset precious metals gains
- Consider an IRA — metals held in a self-directed IRA grow tax-deferred or tax-free (Roth)
What About ETFs and Mining Stocks?
Physical metals and metals-related securities are taxed differently:
| Investment | Tax Treatment |
|---|---|
| **Physical gold/silver** | Collectibles rate (up to 28%) |
| **Gold ETFs (physical-backed)** | Collectibles rate (up to 28%) |
| **Mining stocks** | Standard capital gains (15-20%) |
| **Gold futures** | 60/40 split (60% long-term, 40% short-term) |