Buying metal is the easy part. Selling it is where the tax questions usually start, and where a little preparation saves a lot of confusion. The rules depend on what you hold, how long you have held it, and how the sale is handled. A plain overview of how physical gold and silver are taxed in the US is set out at goldtax.co, and this guide picks up from there with the practical steps that come before and after a sale.
Know what you own and when you bought it
Physical gold and silver are treated as collectibles for federal capital gains purposes. That classification matters because it changes the rate that can apply to a gain compared with ordinary investments. The practical point is that you need your acquisition date and your cost basis. If you inherited the metal, the basis is generally set at the date of death rather than the original purchase price. If it was a gift, different rules can apply. Write down what you know before you contact anyone about selling.
Separate the gain from the rest of your return
A sale produces a capital gain or loss, and for collectibles the holding period decides whether it is short term or long term. Short-term gains are folded into ordinary income. Long-term gains on collectibles can be taxed at a higher rate than long-term gains on shares. This is not a reason to avoid selling, but it is a reason to keep the sale documented and to check the current rules with a tax professional rather than relying on memory.
Understand what the buyer may report
Dealers have reporting obligations for certain transactions, and those obligations depend on the type of metal and the size of the transaction. The thresholds are not the same for every product. A dealer may ask for identification and may file a form about the sale. That filing does not by itself decide your tax; it is a record of the transaction. Keep your own copy of every sale document alongside your purchase records so the two can be matched later.
Check state sales tax before you buy or sell
State sales tax on precious metals varies widely. Some states exempt certain purchases, some apply thresholds, and some treat bullion differently from coins. If you are buying, the sales tax can change your effective cost. If you are selling to a dealer, the tax treatment of the transaction in your state is worth checking in advance. Rules also change, so confirm the current position for your state rather than assuming last year's answer still holds.
Keep the paper trail simple and complete
You do not need an elaborate system. You need dates, amounts, descriptions, and the documents that support them. A folder or a spreadsheet with purchase receipts, sale confirmations, and any dealer forms is enough to answer most questions that arise at filing time. If a document is missing, note what you remember and why the record is incomplete. Honest, organised records are more useful than a tidy guess.
None of this replaces advice from a qualified tax professional who knows your situation. It does mean you can walk into that conversation with the facts in hand, ask sharper questions, and avoid surprises when the return is filed.