Like other profits from financial transactions and investments, you are required to report your profits from buying and selling precious metals such as gold and silver to the Internal Revenue Service (IRS). The government wants you to share with the IRS gold profits that you have received. There are some events when you sell your gold back to a dealer or broker that will trigger reporting requirements to the IRS, and you subsequently have to claim your profits when you file your taxes as well.
How To Report To IRS Gold Profits
Investors who sell their gold back to precious metal dealers will be reported to the IRS if their value exceeds certain levels. The sale of the precious metals are reported to the IRS by the dealer you sold the gold or silver to on a 1099-B tax form. The 1099-B tax form is very similar to other 1099 forms taxpayers receive for things such as dividend and interest income that they have earned throughout the year. The “B” designation on the form means that the revenue is being reported by a business that is not a financial institution such as a bank.
When Do You Report To IRS Gold Profits?
Investors have to report to the IRS gold profits on any transaction. All profits are considered income. Whether the level of profit triggers the precious metals dealer’s requirement to notify the IRS, investors who earn a profit are obligated to share a portion of that capital gain with Uncle Sam, as unpleasant as that act may be. You must list your gains as either a long term or a short term capital gain when you file your taxes before April 15th.
What Levels Trigger IRS Reporting?
The Internal Revenue Service’s reporting requirements for precious metals dealers varies based on the type of gold or silver that is being traded. In most cases, reportable sales of gold are triggered when twenty-five or more ounces are traded in a single transaction. Incidentally, there is actually not IRS gold reporting requirements for American Gold Eagles regardless of the quantity traded. Only pre-1965 U.S. silver coins sales are reportable when the sale’s face value totals more than $10,000. Like most financial transactions, $10,000 is usually the magic number that draws IRS scrutiny. And IRS gold reporting is no different.
Like all investments the IRS wants its share of your profits from buying and selling physical gold and other precious metals. Disclosing to the IRS gold profits is required by law like disclosing profits from the sale of any investment.