How to Calculate Capital Gains Tax on Silver Bullion
Original post by Susan Reynolds of Demand Media
Silver bullion is categorized as a collectible by the IRS, which means you need to pay capital gains taxes on it when you sell it. There are two main types of capital gains taxes: short term and long term. If you held the coins for less than a year, pay short-term capital gains taxes. If you held onto the silver bullion for more than a year before selling it, pay long-term capital gains taxes.
Short-Term Capital Gains Taxes
Write down the amount of money you spent buying the silver bullion. This is your initial investment.
Write down the amount of money you made (or lost) from selling your silver bullion.
Subtract the initial investment cost from the selling price to find your profit or loss. If you made money on the sale, you must pay capital gains. If you lost money, you can write it off as a capital loss.
Multiply your capital gains from the bullion by your regular income tax rate to find out how much you need to pay in short-term capital gains taxes.
Report the capital gains tax from the bullion on IRS Form 1040, Schedule D.
Long-Term Capital Gains Taxes
Write down the amount of money you spent buying the silver and subtract it from the amount you made selling the bullion. If you made money on the sale, you must pay capital gains. If you lost money, write it off on your taxes as a loss.
Find your income tax bracket. If it is 28, 33, or 35, multiply the capital gains of the silver bullion by 28 to find the tax cost.
Report the capital gains tax on Form 1040, Schedule D for the IRS.
Tips & Warnings
- If the silver was a gift or an inheritance, find the fair market value of the bullion and subtract it from the price for which you sold it to find the capital gains or loss.
- Tax bracket calculator (optional)
- The Wealth Channel: Income Tax Treatment of Investments in Gold and Other Precious Metals; James F. Ivers III, J.D., L.LM, ChFC; April 2010
- IRS: Capital Gains and Losses
About the Author
Since completing her English degree in 2006 from the University of South Florida, Susan Reynolds has worked in real estate and higher education. She published her first article online in 2008. She now writes articles for many different websites and also writes marketing articles for various businesses in her hometown.
- Photodisc/Photodisc/Getty Images