How much tax do I pay if I sell gold?
When gold prices make headlines, as they have over the past few years as prices have steadily climbed upward, it's tempting to think in simple terms: Buy low, sell high and pocket the difference. And, if you've been holding gold for a few years — whether in gold bars and coins or gold stocks and gold exchange-traded funds (ETFs) — you're probably sitting on some serious gains right now. After all, gold has gained thousands of dollars per ounce in value over the past year alone, and is now sitting at a price of over $5,000 per ounce.
But before you decide to cash out your gold assets and reap the profits, there's a conversation about taxes that you need to have with yourself and possibly a tax professional. Selling physical gold isn't like selling a stock, after all, and the Internal Revenue Service (IRS) doesn't treat it the same way either. The unique way taxes are assessed on gold assets can catch investors off guard, and understanding what you'll owe before you sell can make a difference in how much of your profit you actually keep.
Here's the tricky part, though: The IRS treats many forms of gold differently, which can change the math. So, how much tax can you expect to pay if you sell your gold assets? That's what we'll detail below.
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How much tax do I pay if I sell gold?
The tax you owe when you sell gold depends on what kind of gold you're selling, how long you held it and how much profit you made. Here's how that works:
Start with your gain (or loss). Your taxable gain is the difference between how much you sold the metal for and your cost basis, which is what you paid, plus certain fees like dealer premiums or shipping. If you sell for less than you paid, you may have a capital loss that could offset other gains.
Holding period matters. If you held the gold for one year or less, your profit is taxed as a short-term capital gain, which is taxed at your ordinary income tax rate. If you held it for more than one year, though, the IRS considers it a long-term capital gain.
Most physical gold is taxed as a collectible. Gold coins, bullion bars and many gold rounds fall under the IRS collectibles category. Long-term gains on collectibles can be taxed at up to 28%, even if your usual long-term capital gains rate on stocks is 15% or 20%. In other words, you might owe more on gold profits than you would on selling shares of an S&P 500 ETF.
Gold ETFs and mining stocks can be different. Some gold ETFs that hold physical bullion are also taxed as collectibles, meaning long-term gains can face the 28% cap. Other ETFs and gold mining stocks are typically taxed like regular securities, using standard short- and long-term capital gains rates. This depends on the specific product you own, so it's worth checking the fund's tax treatment before you sell.
State taxes can apply, too. Federal taxes aren't the whole story here, either. Many states tax capital gains from gold as ordinary income. That means your total tax hit from selling your gold could be higher depending on where you live.
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How taxes should factor into your gold investing strategy
Gold taxes are easy to ignore when you're focused on price charts and headlines, but they matter just as much as premiums, spreads and storage costs. Here's what to consider if gold is part of your long-term plan:
Think about how you're investing in gold. If you're choosing between physical gold, gold ETFs or gold stocks, the tax treatment can tilt the scales. Physical gold offers direct ownership and no counterparty risk, but it often comes with higher tax rates on long-term gains. Some gold investors accept that trade-off for the simplicity and tangibility. Others prefer products taxed like traditional securities instead.
Plan your holding period. If you're close to the one-year mark with owning gold, waiting a bit longer before selling could move you from short-term to long-term tax treatment. That alone can materially change your after-tax return on your investment. Timing isn't everything, but it's part of the strategy.
Factor taxes into your exit price. It's easy to anchor on the idea of selling when gold hits a certain value, but a better approach is to think in after-tax terms: What price actually meets your goal once taxes are paid? This can prevent the disappointment of realizing a gain that feels smaller once the IRS takes its share.
Use gold as part of a broader portfolio, not a tax play. Gold is often used as a hedge against inflation, currency risk or market volatility, not as a short-term trading vehicle. If you're building or adjusting a gold position now, consider how it fits alongside your other investments, your time horizon and your risk tolerance. The tax treatment is just one piece of that puzzle, but it can influence how large a position you want to hold and how long you're comfortable holding it.
The bottom line
If you're planning to sell your gold assets, the decision-making process should include weighing how much of the profit you keep after taxes. Because physical gold is often taxed as a collectible, the IRS can take a bigger bite out of long-term gains than you may expect. The exact amount you'll owe, though, depends on what you're selling, how long you held it and your broader tax situation. Thinking about taxes upfront can help you make smarter buy, hold and sell decisions and avoid surprises when it's time to cash out.
