Should I Plan on Paying Taxes for Precious Metals When I Make a Purchase?
When you buy consumer goods like clothing, food, and electronics in the United States, you must pay taxes on them. While this has been true of precious metals, it is slowly changing. And it makes sense.
In the United States, investments such as stocks are only taxed once they are sold, and those are only taxed on the value they gained since their purchase. This taxable increase is known as a capital gain.
If you purchase an investment for $1000 and sell it for $1200, you need to report the $200 (minus approved expenses) as a capital gain. On the other hand, if you sell gold or silver at a loss, you may be able to claim a capital loss.
Precious Metal Investments, Capital Gains, and Tax Rules
Most investors are not the last owner of gold, silver, platinum, or palladium products. They hold their precious metals as an investment to be sold later. It is intuitive for precious metals to be treated like any other investment under tax laws.
But since states regulate their laws on taxation, there are not any federally regulated tax laws at the state level.
Currently, 42 states have eliminated state taxes on investment-grade precious metals. Depending on where you live, this may not include copper rounds, foreign coins, and metals with fineness less than .900, but each state sets its tax laws.
How do I Find the Tax Rules for My State?
To make your purchase and selling planning easier, we have broken down the precious metal state tax laws for all 50 states and the District of Columbia. Here you will be able to review the tax rules for your state and be prepared for what to expect when you purchase or sell your precious metals.
