Tax Reporting Requirements for Bullion Transactions
The information provided herein is for educational purposes only and is not intended to serve as financial or tax advice. Please consult your tax professional for advice regarding your individual financial or tax situation.
There are two circumstances in which precious metals dealers are legally obligated to report consumer transactions to the IRS:
- when a consumer sells reportable quantities of specific bullion or coins; and
- when a consumer buys goods from a dealer and pays $10,000 or more in cash for the goods.
The former is a tax issue and will be discussed below. The latter is an anti-money laundering issue and is not the subject of this post.
When a consumer sells a reportable quantity of specific bullion or coins, precious metals dealers are required to file Form 1099-B with the IRS. Failure to follow reporting requirements can result in the IRS issuing monetary fines, or even criminal charges against both the precious metal dealer and the customer. It is SellYourGold.com's policy to file Form 1099-B in accordance with IRS guidelines for all reportable transactions. Please be advised that while SellYourGold.com is required to provide certain information about our customers, these details remain strictly confidential between us and the IRS; at no point will any third party have access to their private information.
Form 1099-B
The 1099 series is a set of forms used to report various types of income other than wages, salaries and tips. They allow the IRS to prevent tax evasion by keeping track of individuals who may be selling assets as a source of income. Form 1099-B (Proceeds from Broker and Barter Exchange Transactions) is the IRS form that lists gains or losses for certain kinds of consumer transactions. In the context of precious metal transactions, dealers are required to fill out a 1099-B form when a customer sells them any of the products mentioned in the IRS's Reportable Items List according to the predetermined reportable quantities. The reporting criteria varies according to the particular coin or bullion piece sold.
Bars and Rounds
The reporting criteria for bars and rounds sales by customers is primarily determined by the purity and the quantity of the individual products. However, this criteria differs for each kind of precious metal. For specifics please refer to the table below:
| Reportable Item | Minimum Fineness | Reportable Bar Sizes | Minimum Reportable Amount |
|---|---|---|---|
| Gold Bars | 0.995 | 100 troy oz. & 1 kilo | One 100 troy oz. bar; or 3 kilo bars |
| Silver Bars | 0.999 | 1,000 oz. | 5 bars (5,000 troy oz.) |
| Platinum Bars | 0.9995 | 10 troy oz. or greater | 50 troy oz. |
| Palladium Bars | 0.9995 | 10 troy oz. or greater | 100 troy oz. |
Capital Gains Tax
The IRS considers any profits a customer gains through the sale of their precious metal assets as taxable and is subject to "capital gains" taxes. "Capital gains" refers generally to any profits that resulted from the sale of property or an investment. In terms of precious metals, capital gains occur when a particular coin or bullion piece increases in value after initial purchase and is then sold at a higher price. Any such profits are subject to either a short-term or long-term capital gains tax, depending on how long the asset was held prior to sale.