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. The IRS taxes capital gains on gold the same way it does on any other investment asset. However, if you have purchased physical gold, you are likely to owe a higher tax rate of 28%.
Before investing in a gold IRA, it is important to read Gold IRA company reviews to ensure that you are making the best decision for your retirement savings. Avoid investing in physical metal and you can minimize your capital gains taxes at the ordinary rate of long-term capital gains. And when possible, hold your gold investments for at least one year before selling them to avoid higher income tax rates. The sale of precious metals may have tax implications. Depending on the value of your sale, you may have to pay CGT the benefits you get from the investments.
Unlike gold coins, many of which can be purchased tax-free, CGT is paid for in gold bars, since they are not a form of legal tender. And since gold is an investment asset, when you sell your gold and make a profit, it's taxed as capital gains. Alternatively, you can also invest in products that invest in physical ingots and effectively purchase the metals on your behalf. For larger investors, diversifying your portfolio with CGT-free gold means you can buy larger amounts of gold before paying taxes on your profits.
A 1031 exchange could offer you more flexibility, since it would allow you to defer your capital gains tax bill as long as you reinvest those profits in another investment asset.