Part I · Asset Classes · No. 12

Numismatics and precious metals

Coins, bullion, and the ETFs that hold them. Most gain is collectibles gain at 28%. The narrow §408(m)(3) exception lets certain U.S. coins and minimum-purity bullion sit in an IRA without disqualifying it. The dealer-side cash-reporting regime is unusually rigorous.

The asset class in tax terms

Coins are collectibles under §408(m)(2)(C) and (D). The §408(m)(3) exception excludes from collectibles status:

• Certain gold, silver, and platinum coins minted by the U.S. (American Eagle, Buffalo, certain proof and bullion coins).
• Bullion meeting purity requirements (typically 99.5% gold; 99.9% silver) and held by a trustee for an IRA under specific conditions.

The §408(m)(3) exception is narrow: it permits these items to be held in an IRA without disqualification. It does not change the §1(h)(4) collectibles rate when the item is held outside an IRA — although certain U.S. coins minted from gold (American Eagles) have been the subject of practitioner debate over whether they remain collectibles for §1(h)(4) purposes when held outside an IRA. The IRS position has been to treat them as collectibles for rate purposes.

Exchange-traded funds backed by physical metal (SPDR Gold Trust, iShares Gold Trust, Aberdeen Physical Silver Shares Trust) are treated as direct holdings of the underlying metal under their grantor-trust structures. Gain on shares is collectibles gain.

By contrast, mining-company stock and futures contracts on metals are not collectibles. Gain on mining-company shares is ordinary capital gain at the 20% rate; futures gain is §1256 60/40 capital-and-ordinary.

Acquisition

State sales tax treatment of bullion and numismatic coins varies. Many states exempt bullion sales above a defined threshold from sales tax (Texas, Washington, Pennsylvania, others). Some states exempt all numismatic coins; others tax them at full retail rate. Internet retailers post-Wayfair are required to collect sales tax based on the destination state's rule.

Imported bullion enters the U.S. duty-free in most cases (HTS 7108 gold bullion at zero MFN). Numismatic coins as collectors' pieces enter under HTS 9705 at zero duty.

The American Numismatic Association and Professional Coin Grading Service (PCGS) certify high-end numismatic coins; certification materially affects market value and audit-defensibility of appraisals.

Holding and operation

Storage is the principal carrying cost. Bank safe-deposit boxes, professional vault services (Brink's, Loomis, Sprott Royal Canadian Mint), and home safes all serve. Insurance is moderate cost. None deductible for personal-investment holdings.

Holding in an IRA under the §408(m)(3) exception requires use of a qualifying trustee or custodian. The bullion must be held in physical possession of the trustee, not personally by the IRA owner. Constructive receipt rules — taking physical delivery of IRA-owned bullion personally — disqualify the IRA holding and produce deemed distribution. Recent decisions including McNulty v. Commissioner, 157 T.C. 90 (2021), have enforced this distinction strictly.

Income from the asset

No current income. Sale at gain produces collectibles gain.

Disposition

Sale at long-term gain: 28% federal plus 3.8% NIIT plus state. Dealer Form 1099-B reporting applies to certain bullion and coin sales above defined thresholds (Reg. §6045 categories). The 1099-B threshold issue has produced extensive coin-dealer guidance.

Dealer Form 8300 reporting on cash receipts above $10,000 applies to coin and bullion dealers. The §6050I obligation is widely enforced; coin-shop cash transactions are a recurring §6050I audit category.

Gift and estate

Inclusion at fair market value. Numismatic appraisal by qualified appraiser; PCGS, NGC, and ANACS certifications support valuation. Estate-tax discount claims for fractional-interest coin holdings are rare and difficult.

Charitable contribution: same §170 mechanics. Donation of bullion or coins to a charitable organization is FMV-deductible where the related-use rule is met; donation to charities that will sell is limited to basis.

Common structures

• Personal direct holding. Standard for personal investors.
• IRA under §408(m)(3). Self-directed IRA with qualifying trustee; bullion and approved coins.
• LLC ownership. Liability shield; estate-planning preparation.
• Grantor-trust ETF holdings. SPDR Gold Trust, iShares Silver Trust. Direct beneficial ownership of underlying metal.
• Allocated and unallocated metal accounts. Bullion dealer accounts with title to defined bars (allocated) or pooled metal claim (unallocated). Tax treatment varies; unallocated holdings may have currency-equivalent characterization rather than direct-metal-ownership characterization.

Audit and enforcement landscape

The IRS audits coin and bullion transactions principally through dealer Form 8300 and 1099-B reporting. Underreporting of gain on bullion sales (where dealer reporting may miss certain transactions below thresholds) is a recurring exam issue. The "home-storage IRA" sales pattern — marketed schemes encouraging IRA owners to take physical possession of bullion at home — has produced disqualification and deemed-distribution cases. McNulty is the leading recent decision.

Anti-money-laundering enforcement on precious-metals dealers is administered under 31 C.F.R. §1027. Customer-identification and suspicious-activity-report obligations apply to dealers above defined thresholds. FinCEN periodic guidance updates the dealer obligations.

Jurisdictional notes

• Switzerland. Allocated bullion storage; VAT-free investment-gold transactions.
• UAE (Dubai). Major gold-trading center; DMCC bullion exchange.
• Singapore. Investment-precious-metals GST exemption; allocated storage in The Reserve and similar facilities.
• United Kingdom. Royal Mint allocated storage; CGT-exempt status for legal-tender UK gold coins (Sovereigns, Britannias).
• Canada. Royal Canadian Mint products; storage at the Mint.

Reviewed May 2026