The Help Desk

Your tough questions. MONEY's smart answers.
Presented by

Will I owe taxes on gold and silver coins?

December 24, 2012: 6:30 AM ET

Do you pay a tax on silver or gold coins when purchased or sold? What are some of the advantages and disadvantages of gold and silver coins as an investment? —Vernon

When you buy coins, you may owe sales tax, depending on which state you buy in. But selling triggers a very different tax, says Rob Chapman, founder of Rochester, N.Y.-based advisory firm Compass Wealth. Because the IRS considers precious metals collectibles, a special capital gains rate applies to any profits on their sale. Gains on coins held less than a year are treated as short-term capital gains and taxed at your ordinary income tax rate, while those held for a year or more are taxed at the capital gains rate of 28% for long-term collectibles.

Gold and silver bullion coins provide a hedge against inflation, but there are a few drawbacks, cautions Chapman. For starters, bullion coins such as the Canadian Gold Maple Leaf or the American Silver Eagle often carry premiums of as much as 16% over the value of their gold to cover the cost of minting and distribution. So those coins will have a lot of ground to make up before they can be sold for a gain. Then there's the added cost and inconvenience of storage and insurance. Lastly, unlike stocks or ETFs, precious metals can't be traded instantly at the click of a mouse. "If you want to buy and sell these types of coins," Chapman says, "you have to go and find a buyer yourself."

— Marc Mewshaw

Got a question for the Help Desk? Send it to

Posted in: Investing, Taxes
Join the Conversation
Help Desk

Got a question about your money? We want to hear it! Each week we're answering your questions on CNN, Headline News and

Your email or phone number won't be published; we'll use it to get in touch if we need more information about your question.
Help Desk Video
  • NEXT
    Not enough money in America's 401(k)s
    Despite the surging stock market bringing balances to record highs, the average Fidelity 401(k) account has less than $100,000 in it. That's just not enough. Play
  • NEXT
    Explaining Obama's myRA
    President Obama unveiled a new savings plan for retirement accounts, aimed at encouraging people to start building their nest egg. But how exactly does it work? Play
  • NEXT
    Tricks on how to save in your 20s
    Saving for your retirement in your 20s doesn't have to be a financial burden. Prioritizing your expenses is usually the first step in building a nest egg. Play
  • BACK
    Don't get fooled by Black Friday sales
    Here are some of the tricks that retailers use to make you think you're getting a deal. Keep an eye out for them while shopping this Black Friday. Play
Best Tips
Some of the nation's leading business owners, investors, and thinkers share their thoughts on rebuilding your wealth. More
These strategies can help you manage the challenges -- both emotional and financial -- of helping an aging parent from afar. More
You don't need to be fanatical to get to 780. Those in the know say these moves matter most. More
Featured Newsletters

Tips for saving and spending smarter.

Search This Column
View all entries from this: Week, Month
Help Desk
More help for your career, your investments and your budget.
Powered by VIP.