How is gold taxed? – CBS News

The precious metals market has been unstoppable since early 2024, with the price of gold surging past $2,700 per ounce in October. Investors have flocked to gold amid rising global tensions and market uncertainty, seeking a safe place to protect their wealth.

While gold can be a smart addition to nearly any investment portfolio, it’s important to understand how these investments are taxed — especially when it comes to physical gold. The rules can be complicated, as they vary based on how long you hold the metal and what form you buy it in. Below, tax and investment professionals share what you need to know about gold taxation in 2025, including capital gains rules and special collectibles taxes that could impact your returns.

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How is gold taxed?

Thomas J. Cryan, tax attorney and author of Disrupting Taxes, explains that gold investments fall into special categories within the tax code:

Capital gains tax

“Any gold that isn’t a collectible is taxed under normal capital gains tax rules, and taxed at a 0%, 15% or 20% tax rate if held for more than one year,” says Crystal Stranger, CEO of Optic Tax. The tax rate you’ll pay depends on your total taxable income:

• 0% if you earn up to $47,025 (single) or $94,050 (married filing jointly)
• 15% if you earn between $47,025 and $518,900 (single) or between $94,050 and $583,750 (married filing jointly)
• 20% if you earn above these thresholds

However, timing matters. Rob Burnette, investment advisor representative at Outlook Financial Center, points out that selling gold stocks within a year means your profits get taxed as ordinary income instead of at the lower long-term capital gains rates.

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Collectibles tax

When it comes to collectibles tax, the rules focus on items with value beyond their gold content. “Collectibles are things such as jewelry, coins or commemorative gold pieces that have more inherent value than what the gold’s weight and purity would provide,” highlights Stranger.

If you hold these items longer than a year, you’ll pay a 28% tax rate on any profits. Similar to capital gains tax, ordinary income tax rates apply if you sell before the 12-month mark.

Investment tax

Your gold profits affect more than just your capital gains tax rate. They can impact your adjusted gross income (AGI), which determines your tax brackets and eligibility for various deductions.

“A year of high AGI can trigger the Net Investment Income Tax, which is a 3.8% [surtax on] investment earnings,” Stranger warns. This means a year with large gold profits could cost you more than expected in overall taxes.

How to reduce taxes on gold investments

Stranger and Burnette suggest the following strategies to minimize taxes on your gold investments:

• Open a gold IRA: You can hold physical gold (must be at least 99.5% pure) in a self-directed IRA account, allowing your investment to grow tax-deferred. “Generally, you want to hold higher-taxed assets in IRA accounts to optimize tax benefits,” Stranger advises. Since collectible gold is taxed at higher rates, an IRA could be especially beneficial. However, she notes this requires using a custodian to store the gold and may involve additional fees.
• Let holdings mature: Holding gold investments for longer than a year can qualify you for lower tax rates. This simple strategy can make a substantial difference in your tax bill.
• Think about the form of ownership: Gold stocks and certain ETFs often receive more favorable tax treatment than physical gold.
• Maintain your records: Having accurate cost basis information will help ensure you don’t overpay on taxes when you sell. Custodian companies come and go and could stop tracking the basis, so keep your own spreadsheet detailing purchase/sell dates and prices carefully.

The bottom line

Gold investments can provide a hedge against inflation and valuable portfolio diversification. But the tax implications can be complex and costly if mishandled. One of the biggest pitfalls, according to Stranger, is poor record-keeping. She says she’s seen investors run into problems simply because they fail to track their purchase prices and dates, particularly with small physical gold investments.

Before making moves with your gold investments, speak with a tax advisor who can help you understand your unique situation. They’ll guide you through the tax rates that apply to your gold holdings and help you maintain the detailed records you’ll need come tax time.