The tax implications of selling physical gold or silver holds in these metals, regardless of their shape, such as bullion coins, ingot ingots, rare coins or ingots, are subject to capital gains tax. Capital gains tax is only due after the sale of such shares and if the shares were held for more than one year. Gold can be kept in physical form such as jewelry, coins and ingots, among others. The precious metal is a capital asset, so you must pay taxes on any capital gain you make.
If you've held the yellow metal for less than three years, you'll have to pay the short-term capital gains tax (STCG), in which all profits are added to your income and are taxed based on your investment. For gold held for more than three years, long-term capital gains (LTCG) will be taxed at 20% after indexation. In addition to the appeal of trading gold, you can definitely make money if you can time the drastic rises and falls in gold prices. In the case of gold inherited or received as a gift, the purchase cost would be the cost price paid by the person from whom the gold is inherited.
According to Gary Smith, former international president of the American Society of Appraisers (ASA), more and more consumers are looking to sell gold items, even if gold prices are not particularly high right now. In the case of both inherited gold and gold received as a gift, to determine whether the LTCG or the STCG will apply, the original owner's retention period will also be taken into account. If you are facing a liquidity crisis and are thinking of selling it when gold prices reach historic highs, you should consider the fiscal aspect. This is done when a customer sells any of the products mentioned in the IRS's list of reportable items in specific quantities, which we'll discuss later in this article.
Amanda Gizzi, spokesperson for the jewelry trade organization Jewelers of America (opens in new tab), says that getting more than one offer and selling to an accredited buyer are important steps to safely selling gold and jewelry at a fair price. There are no taxes if you inherit gold or receive gold as a gift from blood relatives, but when you sell it, you are required to pay capital gains tax if you make a profit. But if you have gold or other gold jewelry or coins that you would rather take advantage of, there are ways to sell it safely and at the best price. If you have received gold as a gift from a blood relative, such as parents or siblings, no tax will be charged upon receiving it.
Ebay, for example, has a platform where sellers can send a photograph of their item and receive a quote (opens in a new tab), without needing to submit their item. These pieces include, among others, gold coins with fractional denominations; American Eagle gold or silver coins; any piece of foreign currency that has not been explicitly mentioned in the IRS's list of reportable items, as well as pieces of U.S. currency that were created after the creation of the list in the 1980s. Or you can sell your gold coins in person to a local gold dealer if you don't want to send your coins, but keep in mind that many dealers charge a high premium.