Beware Tax Implications of Selling Precious Metals

Investors should be aware of higher tax rates on collectibles gains before cashing out

Published on Feb. 10, 2026

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Due to higher technology demands, inflation concerns, and rising geopolitical uncertainty, investors are increasingly seeking hard assets like gold, silver, platinum, and palladium. With precious metal prices at record highs, many investors may be looking to sell to raise cash or rebalance their portfolios. However, the IRS considers most precious metals to be "collectibles," so holders are generally taxed at higher rates than for capital gains from stocks, bonds, and other securities.

Why it matters

Investors need to understand the tax implications before selling precious metals, as the collectibles classification can significantly impact their tax bill. This is especially important given the recent dramatic price movements and increased investor activity in this asset class.

The details

Most types of gold, silver, and other precious metals and coins held for investment are classified as collectibles under the Internal Revenue Code. As a result, short-term gains are taxed at the taxpayer's ordinary income rates, while long-term gains (held for over one year) are subject to a maximum federal rate of 28%, rather than the standard 0%, 15%, or 20% capital gains rates. Higher-income individuals may also owe the 3.8% Net Investment Income Tax. Taxpayers can use the specific identification method to determine cost basis and minimize taxable gains, but the default First-In, First-Out method usually results in larger recognized gains. Businesses holding precious metals as inventory may be able to use the Last-In, First-Out method to lower their tax obligation.

  • Gold appreciated over 65% in 2025 and silver appreciated 144%.
  • As of January 2026, gold is up 13% and silver has risen another 19%.

The players

Client X

A client who inherited a coin collection from his father in 2015 and has periodically purchased additional U.S. Mint gold and silver coins since then.

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What’s next

Client X may consider timing sales, using capital losses to offset gains, and evaluating the impact of the collectibles rate before liquidating large positions. He could also explore deferring recognition of taxable gains by contributing the metals to a partnership prior to sale, such as a qualified opportunity fund.

The takeaway

Investors need to be aware of the higher tax rates on collectibles gains when selling precious metals, and should work with their tax advisors to minimize their tax liability through strategic planning and timing of sales.