The 28% Collectibles Rule
The IRS classifies physical gold, silver, platinum and palladium — coins and bullion alike — as "collectibles" under IRC §408(m), the same category as art, antiques, rare coins and stamps. This matters because collectibles are taxed differently from stocks or ETFs on regular securities:
Held ≤ 1 year (short-term): tax rate = your ordinary income tax rate (no 28% cap)
The 28% figure is a ceiling, not a flat rate — if your ordinary income tax bracket is below 28%, you pay that lower rate instead on a long-term gain. It only becomes the binding rate for taxpayers whose ordinary bracket is 28% or higher. This is a meaningfully worse deal than stocks, which get the standard 0/15/20% long-term capital gains rates.
Gold ETFs — Not Automatically Exempt
Whether an ETF gets the same 28% treatment depends on how it's structured, not on the fact that it's an ETF at all. Physically-backed gold ETFs organized as grantor trusts — GLD, IAU, SGOL and similar funds that hold real bullion — pass the same 28% collectibles rate through to long-term gains on their shares. ETFs built on mining company stocks or gold futures contracts are taxed as ordinary securities instead, at the standard long-term rates.
The 3.8% Net Investment Income Tax (NIIT)
On top of the capital gains rate, the 3.8% NIIT can apply to collectible gains for taxpayers with modified adjusted gross income above $200,000 (single) or $250,000 (married filing jointly) — meaning the effective top rate on a long-term physical gold gain can exceed 31% for high earners.
Does the Dealer Report My Sale to the IRS?
Only above specific per-product thresholds, via Form 1099-B — and the threshold varies by exact coin/product. Two concrete, commonly-asked examples:
- American Gold Eagles — not reportable by the dealer, regardless of quantity sold.
- 1oz Canadian Gold Maple Leafs — reportable at 25 coins or more in a single (or related) transaction.
Reporting thresholds affect only whether the dealer also files a 1099-B — they do not change your own obligation to report a taxable gain, which applies regardless of whether a 1099-B was filed.
Sales Tax vs. Capital Gains Tax — Different Things
This page covers federal capital gains tax, owed when you sell gold at a profit. It's entirely separate from state sales tax, charged when you buy gold, which varies enormously by state — see our sales-tax-by-state guide for that (Texas/Arizona/Florida/Colorado/North Carolina fully exempt bullion, Washington now taxes it after repealing its exemption effective January 1, 2026, and several other states exempt only above a dollar threshold).