The IRS treats gold as a collectible. If you sell your gold jewelry, you are required by law to pay capital gains tax. This also applies to the sale of rare stamps, antiques, art, and more. The tax that you pay when selling gold is the same as your regular income tax rate. If you held the gains on collectibles longer than a year, that rate maxes out at 28 percent.
The Definition of Collectibles
It refers to most forms of investment grade gold, including:
Owner and Dealer Reporting
When selling gold in the U.S. for a profit, you need to report that profit on your income tax return. The dealer needs to file a form 1099-B with the IRS, which states that proceeds were paid to a non-corporate seller of precious metals.
Some U.S. states charge sales tax on the purchase of gold. Such costs can quickly add up unless you buy gold from a state that doesn't tax purchases. Sellers, who take a loss when selling gold, do not need to pay tax. An individual can write off a loss of up to $3,000 in that year.
Tax is Unavoidable, But Can be Postponed
You can postpone your tax bill via a 1031 exchange. This means that you reinvest money from your gold sale by buying more gold. If you meet the IRS 1031 requirements, your transactions will not be taxed. You only pay the tax after selling the gold for cash.
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