This is known as capital gains tax. And since gold is a fixed asset, it is taxed as a capital gain if you sell your gold and make a profit. However, depending on how you held your gold, you’ll either have to pay taxes at the normal capital gains rate or at a general rate of 28%. Physical holdings of gold or silver are subject to a capital gains tax equal to your marginal tax rate, up to
a maximum of 28%.
This means that people in the 33%, 35% and 39.6% tax brackets only have to pay 28% for their physical precious metal sales. Short-term gains from precious metals are taxed at normal income rates. Given today’s stock market valuations and historically low interest rates for fixed-income investments, some IRA owners may be interested in converting some funds from stocks and low-risk securities (such as government bonds and money market funds) to precious metals. But before you invest in gold, silver, or platinum, there are a few federal income tax issues to consider
. Precious metals investments
held in your IRA. Therefore, the transaction is characterized as a taxable distribution by the IRA, followed by a purchase of the metal or coin by the IRA owner (you). The practical concern is to find an IRA trustee who is willing to set up an independent IRA and facilitate the physical transfer and storage of precious metal assets. Examples include SPDR Gold Shares (GLD), iShares Gold Trust (IAU) and Aberdeen Standard Gold ETF Trust (SGOL) and iShares Silver Trust (SLV)
For example, you could have an IRA that is invested in precious metal bars and another IRA that invests in liquid assets such as listed stocks and mutual funds. Roth IRA investors pay income tax when making an upfront purchase, but all future growth is tax-free. Investors with a pre-tax IRA pay their regular income tax rates when they withdraw money in retirement. You could withdraw the annual RMD amount from the liquidity account and leave the precious metals account untouched. As soon as a traditional IRA owner reaches 72 years of age, annual IRA Required Minimum Distributions (RMDs) must also be made
According to the latest PLR, the rules that prohibit direct IRA investments in gold do not apply if the gold is held by an independent trustee. However, the coins or gold bars must be held by the IRA trustee or custodian
and not by the IRA owner.