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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?

Neuromancer
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JDelage
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1 Answers1

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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.

mbhunter
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