Tracking Your Cost Basis on Precious Metals

Disclaimer: This is educational content, not tax advice. Consult a qualified tax professional for your specific situation.

What Is Cost Basis?

Your cost basis is the total amount you paid to acquire your precious metals, including:

All of these costs are added together to form your adjusted cost basis.

• Purchase price — the amount you paid for the metal itself
• Premiums — the markup above spot price
• Shipping costs — delivery fees to your location or vault
• Commissions or transaction fees — any dealer charges
• Insurance during transit — if you paid for shipping insurance

Cost Basis Methods

When you have purchased the same type of metal at different times and prices, you need to choose a method for determining which specific lot you are selling:

• Specific identification — you designate exactly which coins or bars you are selling, based on purchase date. This gives you the most control over your tax outcome
• FIFO (First In, First Out) — the IRS default. Assumes you sell your oldest holdings first
• Average cost — available for some investments but generally not applicable to physical metals

Record-Keeping Essentials

• Keep every invoice and receipt — paper and digital
• Record the date, quantity, product, price per unit, and total cost for each purchase
• Note the spot price on the date of purchase — useful for calculating premium paid
• Store records for at least 7 years — the IRS statute of limitations
• If you sell, record the sale date, price received, and buyer

Example: Calculating a Gain

Pro Tips

• Spreadsheet tracking — maintain a simple spreadsheet with columns for date, product, quantity, price, fees, and total basis
• Photograph your metals — include serial numbers on bars for specific identification
• Segregated storage — if you store at a vault, segregated (allocated) storage makes specific identification easier than commingled storage
• Ask your dealer for records — reputable dealers maintain transaction history and can provide documentation