Sell Gold and Silver Tax-Free: Your Ultimate Guide
The Internet is a great place for many things, including buying and selling gold and silver. However, it can sometimes be difficult to separate the truth from the myths. So, if you regularly invest in gold and silver or are thinking about it, you’ve probably read all the mixed advice online, as well as the myths surrounding taxes. And because we want you to succeed, our team at Americash Jewelry & Coin Buyer has created this post to give you accurate information on the matter and also answer questions such as:
- How to sell gold and silver tax-free?
- How to sell gold coins without paying taxes?
- How to avoid gold capital gains tax?
- Do you have to pay taxes when you sell gold?
- Does the IRS know if I sell gold?
- Is gold tax-free?
Understanding the Term “Tax-Free”
Most of the time, people who are new to bullion investment seem to believe that buying and selling gold or silver without paying taxes is either 100% doable or just a fool’s wish. Add to that the conflicting information you can find online, and you have a confused beginner who just wants to make some money. So, to help you understand the term “tax-free,” let’s go over some key points:
- First, U.S. laws for bullion investment are not the same as those of other countries, so you should always check your country’s laws before investing. If you hear your friend in another country bought and sold their gold completely tax-free, that doesn’t mean you’ll have the same experience.
- Second, the state you reside in will determine whether you can buy gold or silver tax-free.
- Last, in some states, you only pay taxes when you sell your gold or silver, meaning buying gold or silver is technically tax-free.
Exploring Legal Ways To Sell Gold and Silver Without Incurring Taxes
There are ways to sell gold and silver without incurring taxes. Let’s go over them.
Investment in Precious Metals IRA Accounts
Some forms of gold and silver are eligible for inclusion in an IRA account. All contributions to the account are tax-deferred until you withdraw the contribution, but the gold and silver must meet certain requirements. For gold, it must be 99.5% pure, but Canadian Gold Maple Leaf coins, certain gold bars, and American Gold Eagle coins (with an estimated purity of 91%) are also eligible. For silver, it must be 99.9% pure, but Canadian Silver Maple Leaf coins, American Silver Eagle coins, and certain silver bars are also eligible.
State-Specific Tax Exemptions and Considerations
Some states are considering removing taxes from the sale of precious metals, while others have already taken the step and made the process completely tax-free. These states include Maine, Virginia, and New York.
Utilizing 1031 Exchanges for Precious Metals
Another way to sell gold and silver without incurring taxes is to use 1031 exchanges. These are tax-deferred transactions that allow you to exchange your gold or silver for other like-kind property. Note that the term “like-kind” covers a wide range of property, including collectibles, automobiles, homes, and office buildings.
The Role of Capital Loss Harvesting
You can use capital losses to offset capital gains and potentially avoid taxes. In other words, if you sell your gold or silver at a loss, the money you receive can help you reduce or eliminate taxes because it won’t be considered a gain and, therefore, taxed.
Navigating Tax Regulations and Reporting Requirements
As mentioned above, you should always check the laws of your country and state before buying or selling precious metals. Here are some things to keep in mind.
Defining Collectibles vs. Capital Assets
The IRS classifies precious metals such as gold and silver as “collectibles.” This term refers to any investment that is held for more than a year and is usually worth much more than what was paid for it. Collectibles are also considered alternative investments and can include any type of art, precious metals and stones, jewelry, antiques, comic books, stamps, coins, cards, and any rare item that doesn’t lose value over time.
Capital assets, meanwhile, include any substantial property with long-term investment benefits. This includes collectibles, houses, buildings, cars, stocks and bonds.
Maintaining Records: What You Need To Keep and Why
Every time you invest in gold or silver, you should practice proper record keeping, as it can help save money and avoid conflicts with the law. As a reminder, you should always keep track of the following information:
- Dates of acquisition
- Purchase prices
- Dates of sales
- Sales prices
- Any other tax-deductible expense, such as storage or insurance
If you do this, you’re protected against audits and can also benefit from those tax-deductible expenses.
FAQs
Below are some of the most frequently asked questions about bullion investing and our answers.
Can I Sell Gold or Silver Without Reporting It?
Yes, in the U.S., you are only required to report a precious metals sale if the purchase exceeds $10,000 and was made with either cash, bank check, or money order.
Are There Any Hidden Costs When Selling Precious Metals?
Yes, some sellers may charge you a commission. We recommend that you compare prices and ask about fees upfront.
How Do Tax Laws Vary by State for Gold and Silver Sales?
The different tax laws make it possible for some people in certain states to buy and sell precious metals such as gold and silver completely tax-free, while others must go through a more expensive and difficult process.
Ready To Sell Your Gold and Silver at Americash Jewelry & Coin Buyer?
At Americash Jewelry & Coin Buyer, we’ve been helping people sell their collectibles for 25 years. If you’re looking for a trusted buyer with an impeccable reputation and the best prices, look no further. Get in touch today, and a member of our team will be in touch shortly with an offer you can’t refuse.
Western Han Gold by Gary Todd is licensed with CC0 1.0 Universal
