Coins and Capital Gains Tax

Above, 2023 American Silver Eagle coin proof set. "Investors wanting to avoid reportable
 sales should buy American Eagles," says Fisher Precious Metals. Photo by Armand Vaquer.

Gold and silver as investments are long-term propositions. Don't expect to make huge profits from any sales of them in the short-term.

But, eventually one will decide to sell their coins or bullion, hopefully at a profit. However, that opens another can of worms: capital gains taxes. 

Sales of gold and silver coins are subject to capital gains taxes. But there are thresholds that are favorable to sellers, provided they aren't exceeded.

One of the big coin and bullion dealers, APMEX, has posted this on the subject of capital gains taxes on silver:

Individual taxpayers who sell silver for a profit may be obligated to report a capital gain when filing their return. This is true for most types of collectibles such as coins, stamps, antiques, and comics. When selling silver coins in consideration of reporting to the IRS, you must report the sales of any combination of 90 percent silver US coins with a face value of over $1000 and 0.9999 fine silver bars totaling over 1000 troy ounces. Other items like silver bars and collectibles, need to be reported if the sales result in a capital gain. If you experience a significant loss when you sell your silver, you may benefit from reporting the loss. 

According to Fisher Precious Metals:

Reportable Sales

Customer sales to dealers of certain precious metals exceeding specific quantities call for reporting to the IRS on 1099B forms. The 1099B forms are similar to other 1099 forms taxpayers commonly receive; the “B” means they have been issued by a business other than a financial entity.

Reportable sales (again, customer sales to dealers) apply to 1-oz Gold Maple Leafs, 1-oz Krugerrands, and 1-oz Mexican Onzas in quantities of twenty-five or more in one transaction. Reporting requirements do not apply to American Gold Eagles, no matter the quantities. Furthermore, reporting requirements do not apply to any fractional ounce gold coins.

Only one common silver product is reportable when sold: pre-1965 U.S. coins. The quantity that causes the filing of a 1099B, however, is not clear. The IRS bases its authority to require reporting on CFTC-approved contracts that call for the delivery of $10,000 face value. Consequently, many dealers do not report sales of pre-1965 U.S. coins unless the sale totals $10,000 face value; others report $1,000 sales.

Sales of American Silver Eagles, privately-minted Silver Eagles, and 100-oz silver bars are not reportable, no matter the quantity. Other precious metals products are reportable, but they are not covered here because the average investor does not trade them.

The best thing to do is to thoroughly check the IRS rules before making a sizable (over $1,000) sale. 

To read more, go here.