Are American Eagle Gold Coins Taxable?
Gold American Eagle coins are one of the world’s most beloved bullion investments, designed by Miley Busiek in 1986 and featuring an American bald eagle carrying an olive branch to its nest full of young.
American Eagle coins are approved by the IRS for use in precious metals IRAs; however, investors should understand how sales taxes and capital gains work with regard to American Eagle coins.
State Sales Taxes
Individual states impose sales taxes, but most do not levy them on gold bullion coins like American Eagle. Therefore, you will only pay sales tax on them when selling it for profit.
Once it comes time to sell, the IRS expects you to pay capital gains taxes on any profits you make from selling collectibles such as American Eagle coins. They are calculated according to your income tax bracket and capped at 28%.
American Eagle coins are an increasingly popular option among investors seeking to diversify their portfolios with precious metals and create a safe haven outside the volatile stock and bond markets. Due to this popularity, the IRS has authorized them as additions to certain self-directed IRAs (known as self-directed bullion accounts), allowing these accounts to contain only precious metals approved by them (such as American Eagle bullion coins).
Capital Gains Taxes
Sale of most precious metal coins are subject to federal capital gains taxes, which vary based on factors like how long an investor holds onto their investment, personal income level and whether or not it’s collectible coinage.
Most states exempt government-issued bullion coins with face values, like American Gold Eagles and Silver Eagles, from sales taxes. However, collector versions such as proof coins are considered collectibles by the IRS and must be sold at 28% tax rates when you sell them.
Maintaining detailed records of your purchases and sales, such as receipts, invoices and market values on the date of sale is vital when calculating how much profit must be taxed. When doing this, take note of your cost basis (original investment cost for coins you purchased), cost basis adjustments as well as any capital gains taxes due on any gold coins purchased. When in doubt consult an experienced tax professional.
American Eagle gold coins and other bullion are frequently advertised for inclusion in individual retirement account (IRA) portfolios, but such investments must meet certain purity requirements to qualify as investment grade investments. Thus, this coin type has come to be known as ‘investment grade.’
Coins have a face value listed on their back, but their precious metal content makes them far more valuable. According to the IRS, coins considered collectibles should be taxed at your marginal tax rate upon sale; short-term capital gains would apply when owned for less than 12 months while long-term gains apply when owned for longer.
Utilizing records of when and how much gold was purchased along with how much you received in sales can assist in accurately reporting capital gains realized from sales of your gold. Any taxes due can be offset against losses experienced within that same year.
Maintaining accurate records of coin purchases and sales is vitally important, such as receipts, invoices, market values of coins purchased/sold on each date of sale or purchase, etc. Dealers selling precious metals above certain quantities are required to submit reports with the IRS on form 1099B for these transactions.
American Eagle gold coins may be exempt from state sales taxes in certain states; however, federal capital gains taxes still apply when selling these investments for profit.
Many Americans invest in precious metals as a way to diversify their portfolios. The Internal Revenue Service permits certain Individual Retirement Accounts (IRAs) to store bullion such as gold, silver and platinum; it also allows these accounts to contain coins such as American Eagles; in fact many investors start by purchasing these IRA-approved coins to build up their portfolio before selling them off later for profit that can be taxed as either long-term capital gains or short-term capital gains.