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Last updated: August 12, 2026 · By White Metal Resources Editorial
Quick answer: When you sell physical silver or gold that you own personally, any gain is taxed by the federal government. The tax code treats bullion as a collectible under IRC 408(m)(2).
If you held the metal more than a year, the gain is a long-term collectibles gain, capped at a maximum federal rate of 28 percent under IRC 1(h)(4) and 1(h)(5). If you held it a year or less, the gain is short-term and taxed at your ordinary income rate, which reaches a top federal rate of 37 percent for tax year 2026.
Your gain is the sale proceeds minus your cost basis, which is what you paid for the metal plus any dealer premium and shipping. You report the sale on IRS Form 8949 and Schedule D, running the long-term amount through the 28% Rate Gain Worksheet in the Schedule D instructions. Most states also tax the same gain as ordinary income, at rates set by each state.
Short on time? The essentials
- Silver, gold, platinum, and palladium held personally count as collectibles under IRC 408(m)(2), no matter the coin or bar form.
- A long-term gain, on metal held more than 1 year, is capped at a maximum federal rate of 28 percent under IRC 1(h)(4) and 1(h)(5).
- A short-term gain, on metal held 1 year or less, is taxed at your ordinary income rate. The top federal bracket for 2026 is 37 percent.
- Your gain is sale proceeds minus your cost basis. Basis includes the dealer price you paid, plus premium, shipping, insurance, and appraisal fees.
- You report the sale on IRS Form 8949, feed it to Schedule D, and run any long-term amount through the 28% Rate Gain Worksheet in the Schedule D instructions.
- Most states with an income tax treat the same gain as taxable income. State rates vary and rarely offer a preferential rate for collectibles.
- A dealer may issue Form 1099-B for a bullion buyback of certain sizes and coin types under IRS rules. Ask the dealer which items and quantities trigger a 1099-B before you sell.
- Selling inside a precious-metals IRA converts the tax event. Growth is deferred; a traditional distribution is taxed as ordinary income, and a qualified Roth distribution is federal-tax-free.
- Home storage of IRA metal is not permitted, so you cannot roll metal you already own personally into an IRA. Personally-held metal you sell later will always hit the collectibles path.
- Keep every invoice, appraisal, and shipment receipt. Basis records are your only defense in an audit years later.
This page explains what the federal government takes when you sell physical silver, gold, platinum, or palladium that you own in your own name, outside a retirement account. It covers the rate, the holding-period test, how to compute basis, how to report the sale, and how state income tax fits on top. Every figure traces to an IRS or statutory source, cited inline.
Why the tax code treats bullion as a collectible
Physical silver, gold, platinum, and palladium held in your own name are collectibles for federal tax purposes. The definition sits in IRC 408(m)(2), which includes any metal or gem, plus works of art, rugs, antiques, stamps, coins, and certain other items (source: 26 U.S.C. Section 408(m)). The label matters because the tax code sets a special maximum rate for long-term gains from collectibles.
The label attaches to the metal itself, not the form. A 1 oz Silver American Eagle, a 100 oz silver bar, a Platinum Maple Leaf, and an ounce of Palladium American Eagle are all collectibles when held outside an IRA, regardless of fineness. A generic silver round from an approved refiner is treated the same way.
An IRA carve-out exists in IRC 408(m)(3), which lets approved bullion held by an approved trustee sit inside a self-directed IRA without being treated as a collectible for account purposes. That carve-out is why a precious-metals IRA is legal at all. It does not apply to metal you hold in a safe at home or in a bank safe-deposit box.
What rate applies to a metal sale outside an IRA
Two federal rates can apply to your gain, and the difference is large. A long-term collectibles gain has its own cap. A short-term gain has none, so it climbs into your ordinary bracket.
The 28 percent cap is set by IRC 1(h)(4) and 1(h)(5). It is a maximum, not a fixed rate. If your marginal ordinary rate is below 28 percent, the collectibles rate on your long-term gain is your marginal rate. The 28 percent number only kicks in as a ceiling when your ordinary bracket would be higher. IRS Topic 409 confirms the cap in plain language (source: IRS, Topic No. 409, Capital Gains and Losses).
A short-term gain is taxed at your ordinary income rate. For tax year 2026 the top federal bracket is 37 percent (source: IRS Newsroom, 2026 inflation adjustments). That is the ceiling on a same-year flip of bullion you bought and sold within 12 months.
Precious metals IRA early-withdrawal penalty estimator
Take money out of a precious metals IRA before age 59 and a half and the IRS adds a 10% federal additional tax. Many states add their own additional tax on top, so check your state. The federal penalty is estimated below.
Estimate only, not tax advice. The 10% federal additional tax applies to early distributions before age 59 and a half; exceptions exist. Your state may add its own additional tax, and ordinary income tax applies separately. Source: IRS Publication 590-B. Consult your tax advisor.
Worth knowing: the 28 percent cap is above the top standard long-term rate of 20 percent that applies to most stock and mutual-fund gains. A high-bracket investor who sells appreciated stock held over a year pays at most 20 percent federal. The same investor selling appreciated silver of the same size hits the higher 28 percent ceiling on the collectibles portion.
Short-term versus long-term: the one-year line
Whether your gain is short or long turns on how long you held the metal. IRC 1222 defines a long-term capital gain as a gain on a capital asset held for more than 1 year. Held 1 year or less, the gain is short-term.
The clock runs from the day after the trade date on your purchase invoice to the trade date on your sale. A gap of exactly 12 months is short-term. A gap of 12 months and 1 day is long-term. That single day changes the rate ceiling from 37 percent to 28 percent for a high-bracket seller, so date discipline matters.
Two special rules can shift the clock. Inherited metal takes a fresh long-term status from date of death, regardless of how long the decedent held it. Gifted metal generally takes the giver's basis and holding period, so a gift can inherit a long-term clock already in progress. Both cases are covered in the inherited silver and gold guide.
Calculating basis: what counts as cost
Your taxable gain is the sale proceeds minus your cost basis. Proceeds is what the dealer pays you, before their spread but after any commission the invoice deducts. Basis is what you paid to acquire the metal.
Basis is more than the raw spot price on the day of purchase. It includes the dealer premium over spot, sales tax you paid at retail (if any), shipping to your address, insurance in transit, and any assay or appraisal fee tied to the specific coins or bars you bought. Add each of those to the number on the invoice, and hold the paperwork.
Storage fees and safe-deposit-box rent do not add to basis. Those are personal expenses that ride separately, not part of the cost of the asset. Also excluded are gasoline, mileage, or time you spent picking up the coins.
| Item | Included in basis | Notes |
|---|---|---|
| Dealer price paid, including premium | Yes | The full invoice price for the coins or bars, including the dealer premium over spot. |
| Sales tax paid at retail | Yes | Where a state charges sales tax on your purchase, add it to basis. |
| Shipping to you | Yes | Freight charges tied to the specific purchase. |
| In-transit insurance | Yes | Coverage that traveled with the shipment. |
| Assay or appraisal fee at purchase | Yes | A fee for verifying the coin or bar you bought. |
| Annual storage or safe-deposit-box rent | No | A recurring personal expense, not part of asset cost. |
| Insurance in your name, after receipt | No | A separate personal policy, not attached to the asset. |
| Mileage or fuel to pick up coins | No | Personal travel is not basis for a collectible. |
Framework based on IRS Publication 551 basis rules and IRS Publication 550 investment guidance. Checked August 2026.
Selling costs, such as an assay fee at sale or a shipping charge to the buyer, reduce your proceeds rather than adding to basis. The tax outcome is the same in either place. Keep the numbers you list on Form 8949 tied to the paperwork you can produce in an audit.
Picture a saver, Kate, who bought a 100 oz silver bar 3 years ago and sells it now, in a bracket where her ordinary marginal rate is 32 percent. Assume for illustration that the numbers are as follows.
- Purchase invoice: 2,400 dollars for the bar. Add 60 dollars dealer premium already in the invoice, 30 dollars shipping, and 15 dollars in-transit insurance. Her basis is 2,505 dollars.
- Sale invoice today: 3,500 dollars proceeds, before a 20 dollar shipping fee to the buyer. Net proceeds are 3,480 dollars.
- Long-term collectibles gain: 3,480 minus 2,505, which equals 975 dollars.
- Because Kate's ordinary marginal rate of 32 percent is above the 28 percent collectibles cap, her federal tax on this long-term gain is 975 dollars times 28 percent, which is 273 dollars.
- Had she sold at month 11 instead, at short-term ordinary rates, the same 975 dollar gain would face her marginal 32 percent, or 312 dollars. Waiting past the 1-year line saved 39 dollars on this small gain, and would save more on a larger one.
The figures are illustrative, not quotes from any dealer or bracket schedule for your situation. State income tax on the same gain would sit on top of these federal numbers. This is not tax advice; consult a licensed advisor for your own return.
How to report a metal sale on your tax return
The reporting path is the same one used for any capital asset. It starts on Form 8949, flows to Schedule D, and, for a long-term collectibles gain, passes through the 28% Rate Gain Worksheet in the Schedule D instructions.
The steps below outline the flow a personal filer follows.
- Gather your basis paperwork. Pull the original purchase invoice, any shipping and insurance charges added to that purchase, and the sale invoice or 1099-B if the dealer issued one.
- Report each sale on Form 8949. List the description, acquisition date, sale date, proceeds, basis, and gain or loss. Use Part I for short-term sales and Part II for long-term sales.
- Carry the totals to Schedule D. Short-term totals flow to Schedule D line 7. Long-term totals flow to line 15. Combine to get net capital gain or loss on line 16.
- Flag the long-term collectibles portion. If you have a net long-term gain, the collectibles piece of it goes through the 28% Rate Gain Worksheet in the Schedule D instructions. The worksheet caps the federal rate on that piece at 28 percent, or your marginal rate if lower.
- Feed the result to Form 1040. The Schedule D total flows into your Form 1040, and the tax calculation on the collectibles portion uses the Schedule D Tax Worksheet in the instructions to Schedule D.
- Keep records for at least 7 years. A state may audit longer than federal, and basis disputes can reach back further where a coin was held for decades.
Two references sit at the core of this flow. Schedule D and its instructions carry the worksheets; Form 8949 carries the transaction detail. Both are updated annually (source: IRS, About Schedule D (Form 1040); IRS, About Form 8949).
Does state income tax hit the same gain
Most states with an income tax also tax the same gain, and few offer a preferential rate for long-term or collectibles gains. A state usually starts from your federal adjusted gross income or federal taxable income, then applies its own bracket schedule, so the collectibles gain rides in on the federal number.
Nine states have no broad-based individual income tax, so the state tax layer on a metal sale is zero for residents there: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. (Washington now applies a limited excise on some capital gains, but not on typical collectibles at retail size; verify with the Washington Department of Revenue for your facts.) See our state tax on IRA distributions guide for the broader income-tax map.
The 28 percent federal cap does not appear at the state level for most states. A typical state applies its ordinary bracket to the gain, so a high-bracket seller can face a combined federal-plus-state rate above 30 percent on a long-term collectibles gain. Check your state Department of Revenue for the exact treatment before you sell.
Dealer reporting: when does a 1099-B appear
A precious-metals dealer that buys bullion back from you may be required to file IRS Form 1099-B for the transaction, depending on the item and the quantity. IRS Publication 544 covers the general 1099-B rules; the dealer-side detail is in the Instructions for Form 1099-B (source: IRS, Instructions for Form 1099-B).
The trigger for a bullion buyback is not fineness or brand alone. It turns on whether the metal you are selling matches a coin or bar that fits an IRS-recognized reportable list, tied to CFTC-regulated futures-contract specifications. Some items and quantities trigger a 1099-B; many do not. Ask the dealer, in writing, which of your specific coins or bars is on that list before you sell.
Whether or not a 1099-B is issued, your federal tax obligation is the same. The gain is reportable on Form 8949 and Schedule D. The 1099-B is a matching document that helps the IRS reconcile, not the rule that creates the tax.
How losses on a metal sale work
If you sell for less than your basis, the loss is a capital loss. Long-term collectibles losses net against long-term collectibles gains first, then against other long-term capital gains under the Schedule D netting rules, then against short-term gains. A net capital loss can offset up to 3,000 dollars of ordinary income each year, with any excess carried forward indefinitely under IRC 1211.
A metal held for personal use, however, is different. Losses on assets used personally are generally not deductible under IRC 165(c). If a coin you bought purely as an investment falls in value and you sell, the loss can be deductible. If a coin you kept for enjoyment or display falls in value, the loss usually is not. Document your intent up front.
The same gain inside an IRA, side by side
The wrapper you use for the metal changes the tax event, not the metal. Inside a precious-metals IRA, the collectibles rate never applies to the metal itself. IRC 408(m)(3) carves approved bullion held by an approved trustee out of the collectible definition for account purposes (source: IRS, Investments in collectibles in individually directed qualified plan accounts). Instead, growth is deferred, and a later distribution is taxed under the rules for that account type.
A traditional IRA distributes at ordinary rates. A qualified Roth distribution is federal-tax-free. Neither pathway triggers the 28 percent collectibles cap, because the account itself has been the taxable entity along the way. The full breakdown lives in the 28 percent collectibles tax and IRA guide.
| Wrapper | Federal tax on the growth | Rate ceiling on the collectibles piece |
|---|---|---|
| Personal ownership | Tax at sale, on the gain | 28 percent long-term cap; short-term at ordinary rates up to 37 percent for 2026 |
| Traditional precious-metals IRA | Deferred; ordinary income at distribution | Collectibles rate does not apply; ordinary marginal rate up to 37 percent for 2026 at distribution |
| Roth precious-metals IRA | Federal-tax-free on a qualified distribution | Collectibles rate does not apply; qualified Roth pathway pays zero federal on qualified withdrawals |
Sources: IRC 408(m); IRC 1(h)(4)-(5); IRS 2026 bracket schedules. State income tax is not shown; most states tax an IRA distribution at ordinary rates and tax a personal-metal gain at ordinary rates too. Checked August 2026.
The IRA wrapper is not free, and the collectibles-tax saving is only part of the picture. Annual custodian and depository fees eat into an IRA balance over time. Use the calculator below to see how a hypothetical fee rate compounds against an account balance, so you can weigh the yearly wrapper cost against the potential 28 percent saving on a large gain years from now.
[gc_calc_fee_drag cta="0"]Note one hard limit before you compare on paper. You cannot roll physical metal that you already own personally into an IRA. Contributions to an IRA are cash-only under IRC 408(a). Metal you already hold in your name goes on the personal-tax path when you sell it; only newly-purchased bullion inside a compliant self-directed IRA structure gets the wrapper treatment.
When selling outside an IRA is the wrong call
Selling personally-held metal is not a decision to fold into a template. It is the wrong move in specific fact patterns, and naming them plainly is part of an honest guide.
It is usually the wrong move in these situations:
- You are in a high bracket with a large long-term gain, and you have time. A 28 percent federal cap on a large gain is a meaningful hit. If you can spread the sale over multiple tax years, you may absorb the gain at lower brackets each year and shave the effective rate.
- You planned to leave the metal to heirs. Physical metal in your name at death generally receives a step-up in basis to fair market value under IRC 1014. Selling now, then leaving cash, forfeits that step-up on the built-in gain. See the inherited-metal guide for the mechanics.
- You would sell before the 1-year line. A same-year flip is taxed at ordinary rates, with a ceiling of 37 percent for 2026 rather than 28 percent. Waiting past 12 months, when the price picture allows, changes the ceiling.
- You need the metal-sale record for state estate planning that the sale would break. State-specific estate mechanics can attach to physical assets differently from cash proceeds. Coordinate with a state-licensed estate attorney before liquidating a long-held position.
- You are pressured by a buyer. A sale under time pressure at a wide spread rarely nets more than a patient sale. If a dealer will not commit a buyback quote in writing, walk.
If any of the above matches your facts, the sensible call is to slow down and price the trade after a licensed tax advisor and, where relevant, an estate attorney have looked at it. There is no CTA in this section on purpose. The wrong sale can be reversed only at the cost of the same 28 percent cap or worse on a repurchase later.
Selling-silver tax questions, answered
What is the federal tax rate when I sell silver or gold I own personally?
A long-term gain, on metal held more than 1 year, faces a maximum federal rate of 28 percent under IRC 1(h)(4) and 1(h)(5). A short-term gain is taxed at your ordinary income rate, up to a top federal bracket of 37 percent for 2026. State income tax usually applies on top of the federal amount.
Why is silver or gold taxed at 28 percent instead of 20 percent?
Because the tax code treats bullion as a collectible under IRC 408(m)(2). The 20 percent top rate applies to standard long-term capital gains on assets like stocks. Long-term gains on collectibles sit under IRC 1(h)(4) and 1(h)(5), which set a maximum federal rate of 28 percent for the collectibles piece.
How do I calculate my basis in a coin I bought years ago?
Basis is what you paid to acquire the metal, including the dealer price, the dealer premium over spot, any sales tax you paid at retail, shipping to your address, in-transit insurance, and any assay fee attached to the specific purchase. Recurring storage fees do not add to basis. Keep the original invoice and shipment records.
How do I report a bullion sale on my tax return?
List each sale on Form 8949 with the description, dates, proceeds, and basis. Long-term totals flow to Schedule D line 15; short-term to line 7. Run the long-term collectibles portion through the 28% Rate Gain Worksheet in the Schedule D instructions. The Schedule D result feeds your Form 1040.
Will the dealer send me a 1099-B when I sell them my silver?
Sometimes. IRS rules require dealer reporting on Form 1099-B for specific coins and bars in specific quantities tied to CFTC futures-contract specifications. Some items do not trigger it. Ask the dealer, in writing, whether your specific coin or bar and quantity are on the reportable list before you sell. Your tax obligation is the same either way.
Does my state also tax the gain?
In most states, yes. Nine states levy no broad individual income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Most other states tax the gain at their ordinary bracket, without a preferential collectibles rate. Verify with your state Department of Revenue for the exact treatment.
Can I avoid the 28 percent rate by rolling my metal into an IRA?
No. IRA contributions must be in cash under IRC 408(a). You cannot transfer metal you already own personally into an IRA. A precious-metals IRA can hold newly-purchased bullion under IRC 408(m)(3), but the wrapper does not retroactively cover metal you already held in your name.
What happens if I lose money on a bullion sale?
If the metal was held as an investment, the loss is a capital loss. It nets long-term against long-term first, then against short-term gains under the Schedule D rules. A net capital loss offsets up to 3,000 dollars of ordinary income per year under IRC 1211, with any excess carried forward. Losses on metal used personally are generally not deductible under IRC 165(c).
Sources
- IRS, Topic No. 409, Capital Gains and Losses. Checked August 2026.
- Cornell Legal Information Institute, 26 U.S.C. Section 408 (including 408(m) collectibles and 408(a) cash-only contribution rules). Checked August 2026.
- Cornell Legal Information Institute, 26 U.S.C. Section 1 (including 1(h)(4) and 1(h)(5) collectibles rate). Checked August 2026.
- IRS, About Schedule D (Form 1040) and the 28% Rate Gain Worksheet. Checked August 2026.
- IRS, About Form 8949, Sales and Other Dispositions of Capital Assets. Checked August 2026.
- IRS, Instructions for Form 1099-B. Checked August 2026.
- IRS, Investments in collectibles in individually directed qualified plan accounts (Issue Snapshot). Checked August 2026.
- IRS Newsroom, 2026 retirement plan and inflation-adjusted brackets (Notice 2025-67; Rev. Proc. 2025-32). Checked August 2026.
- IRS, Publication 550, Investment Income and Expenses. Checked August 2026.
- IRS, Publication 551, Basis of Assets. Checked August 2026.
