Capital gains tax on silver and other precious metals

Every precious metal is a collectible for tax

Collectors sometimes hear that gold is the special case. It is not. IRC 408(m)(2)(C) lists "any metal or gem" as a collectible, and IRC 1(h)(5) borrows that list for the capital gains rate. The IRS's Schedule D instructions (2026) spell it out: collectibles include "metals (such as gold, silver, and platinum bullion)." So when you sell silver bars, silver rounds, American Silver Eagles, platinum coins or palladium bars held longer than one year, the gain is 28% rate gain: taxed at your ordinary bracket rates, capped at 28% (IRC 1(h)(4), 2026). Held a year or less, it is short-term gain taxed like wages.

The IRA exceptions do not help on a sale. IRC 408(m)(3) lets an IRA own the silver coin described in 31 U.S.C. 5112(e), platinum coins under 5112(k), and bullion of futures-delivery fineness, but 1(h)(5) applies 408(m) "without regard to paragraph (3)," so the same Silver Eagle that an IRA may hold is a collectible when you sell it from your own safe. The rate table for ordinary investments is on the long-term capital gains guide, and the full list of collectible types is on the collectibles hub.

What the 28% cap means for a silver stacker

Silver holders tend to build positions slowly and sell in one go, which is exactly when brackets bite. Our single California seller with $120,000 of wages and an $80,000 gain falls in the 22% and 24% federal brackets for 2026 (the 24% bracket for single filers ends at $201,775 of taxable income, Rev. Proc. 2025-32), so the 28% cap never applies; the federal tax is $19,164 and California adds $7,440, for $26,604 in all. In Texas, with no income tax, the bill is $19,164, a $7,440 difference created only by the state line.

Wait for a low-income year and the same California sale costs $19,713. Compared with stock in that year, which would cost $12,430 because of the 0% and 15% brackets, the collectibles label still costs $7,283: silver never reaches the 0% capital gains bracket, since collectibles gain is taxed at ordinary rates up to the cap (IRC 1(h)(4), 2026). Net investment income tax at 3.8% applies only when modified AGI passes $200,000 single or $250,000 joint (IRC 1411, thresholds not indexed), so many silver sellers never pay it.

Junk silver: face value is not your basis

"Junk silver" means circulated U.S. dimes, quarters and half dollars dated 1964 and earlier, which are 90% silver. The Coinage Act of 1965 (P.L. 89-81) replaced the silver in dimes and quarters with copper-nickel clad and cut the half dollar to a 40% silver clad coin, which is why these older coins trade on melt value today.

• Your basis is what you paid, not the face value stamped on the coin. A bag bought for $8,000 that sells for $14,000 has a $6,000 collectibles gain, even though its face value is a few hundred dollars.
• Coins pulled from circulation or inherited are different. Coins you found in change have a basis equal to face value, because that is what you paid. Inherited coins take fair market value at death under IRC 1014.

Dealers buy junk silver by face value in bags, so the paperwork you get often shows face value and a price. Translate that into your own basis records before you file.

Platinum and palladium follow the same rule

Platinum and palladium follow silver exactly: any metal is a collectible under 408(m)(2)(C), so gain on a platinum bar or a palladium coin held over a year carries the 28% maximum (IRC 1(h)(5), 2026). The U.S. Mint's platinum coins are authorized by 31 U.S.C. 5112(k), and the 1-ounce palladium coin by 5112(a)(12) at .9995 fineness. Those authorizations matter only for IRAs.

Platinum and palladium ETFs, mining shares and futures are taxed under their own rules, not as physical metal held by you; see the related fund page.

Basis records: the silver seller's real problem

Silver is cheap per ounce, so most holders bought in dozens of small purchases at different prices. The gain on a sale depends on which ounces you sold.

• Include the premium. Your cost includes the dealer premium over spot and any shipping you paid to buy. Selling commissions and the buyer's discount to spot reduce your amount realized.
• Identify the lots. The detailed stock-lot rules in Treas. Reg. 1.1012-1(c) are written for stock. No IRS rule specifically governs bullion lots, so the practical standard is records that show which purchase each sold piece came from: invoices, serial numbers on bars, and a log that ties each sale to a purchase. Without records, the IRS can treat the basis as unproven.
• Report every sale. Each sale goes on Form 8949 with adjustment code C for collectibles; collectibles sales cannot be aggregated directly on Schedule D the way some 1099-B stock sales can (Form 8949 instructions, 2026).

Losses, wash sales and dealer reporting

Silver bought as an investment is a transaction entered into for profit, so a loss on its sale is deductible as a capital loss under IRC 165(c)(2). Collectibles losses first offset collectibles gains in the 28% group (IRC 1(h)(4)(B)), then the rest of your capital gains, and up to $3,000 a year of net loss can offset ordinary income under IRC 1211(b), with the excess carried forward. Silver jewelry or flatware you used at home is personal-use property, and a loss on it is not deductible.

The wash sale rule in IRC 1091 disallows losses on "shares of stock or securities" repurchased within 30 days. Physical silver is neither, so by its terms the rule does not reach a sale and repurchase of bars or coins. The IRS has not issued guidance on this point for physical metal, and a sale and immediate buyback with no economic change could still be challenged under general doctrines, so leave real time or a real change in position. See tax-loss harvesting.

On reporting: under the IRS Form 1099-B instructions (2026), a dealer reports a precious metals purchase from you only if the metal is in a form approved for delivery on a CFTC-regulated futures contract and in at least the contract's minimum quantity, with sales to you within 24 hours combined. Small sales of Eagles or a few bars are typically not reported by the dealer. You report the gain regardless.

Where you live, and what you do instead of selling

California taxes silver gain as ordinary income with no separate capital gains rate, up to 12.3% plus 1% over $1 million (FTB, 2026); see California capital gains tax. Texas and the other no-income-tax states add nothing; compare them on Texas and the state table. A move before a big sale can change which state taxes the gain on personal property you carry with you, a planning point covered on moving states before a sale.

Alternatives to a cash sale: hold for the basis step-up at death under IRC 1014 (step-up at death); give lots to family members in low brackets, who keep your basis under IRC 1015 and pay their own rate; or sell over several tax years to stay in lower brackets. Swapping silver for gold is a taxable sale, since IRC 1031 covers only real property. The gold-specific rules, including jewelry and coin reporting, are on capital gains tax on gold. If a metals sale coincides with a business or property sale, model the whole year: Get the Big Sale Tax Analysis.

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Frequently asked questions