What are collectible tax rates vs capital gains for precious metals in 2025?
Executive summary
Long-term gains on physical precious metals are taxed under the IRS “collectibles” rules: they are taxed at your ordinary (marginal) income tax rate but only up to a statutory cap of 28% for gains on assets held more than one year (short‑term sales are taxed as ordinary income up to 37%) [1] [2]. ETFs or funds that own physical bullion and are treated as grantor trusts generally face the same collectibles tax treatment; other vehicle types (mining stocks, futures funds) can be taxed at the lower standard long‑term rates (0/15/20%) or different specialty rates [3] [4].
1. Collectibles classification: why precious metals sit in a special tax box
The IRS treats physical gold, silver, platinum and palladium as “collectibles,” not like most securities; that reclassification means long‑term gains from selling bullion, bars or coins are subject to the collectibles capital‑gains rules rather than the usual 0/15/20% long‑term rates that apply to most stocks and bonds [1] [5].
2. The headline rates: long‑term cap of 28%, short‑term taxed as ordinary income
If you hold a collectible more than one year, your taxable gain is subject to long‑term capital‑gains treatment but capped at a maximum 28% federal rate; if you hold it one year or less, the gain is short‑term and taxed at your ordinary income rate (which can reach 37%) [1] [2]. Multiple mainstream tax guides and reporting outlets reiterate the same ceiling and the one‑year holding rule [6] [7].
3. How “your rate” actually works — not always a flat 28%
Collectibles gains scale with your marginal income tax rate up to the 28% cap: taxpayers in lower marginal brackets pay their ordinary rate on the collectible gain (for example, someone in the 12% bracket would pay 12% on a long‑term collectible gain), while taxpayers in high brackets pay up to, but not above, 28% [8] [9]. That nuance is frequently misstated as a flat 28% for everyone; authoritative IRS summaries and tax advisors show it is capped, not uniformly flat [1].
4. Vehicle matters: bullion, ETFs, futures and mining stocks are treated differently
Physical bullion and ETFs structured as grantor trusts that actually hold metal are typically taxed like the metal itself—i.e., collectible treatment and the 28% long‑term cap—so common products like GLD or IAU can trigger collectible treatment [3] [10]. By contrast, ETFs or funds that invest in futures or mining stocks are taxed under ordinary capital‑gains regimes (and sometimes specialized rules), which can mean long‑term gains taxed at the lower 0/15/20% tiers or different top rates [3] [4].
5. Extra taxes and state rules that change the final bill
Federal capital‑gains tax is only part of the picture: high‑income investors may owe the 3.8% Net Investment Income Tax (NIIT) on investment gains in addition to the collectible rate, and many states impose their own income or sales taxes on purchases and sales of precious metals—state sales tax exemptions and rules have shifted recently in several states, altering the after‑tax economics [4] [11] [12].
6. Reporting and planning implications investors miss
Several outlets warn investors that a big return in gold markets can carry a surprise tax bite because collectible treatment produces a higher long‑term ceiling than stocks; advisers recommend clarifying the ETF structure, tracking holding periods, and considering tax‑deferred accounts (IRAs) for high‑tax assets, while also recognizing different ETFs and trusts can change tax outcomes [3] [13] [10].
7. Disagreements and limits in current reporting
Sources concur on the core rule (collectibles cap at 28%, short‑term taxed as ordinary income) [1] [2] [6]. Differences appear in examples and emphasis—some consumer pieces simplify to “28%” for long‑term gains (which can imply flatness), while tax‑oriented sources stress the cap and income‑bracket mechanics [9] [8]. Available sources do not mention any 2025 federal law changes that alter the collectible ceiling, nor do they provide an exhaustive state‑by‑state tax table within these excerpts—readers should consult their state guidance and the full IRS publications for precise bracket thresholds [1] [11].
8. Bottom line for 2025 investors
Expect physical precious metals and physically backed grantor‑trust ETFs to be taxed under the collectibles rules: long‑term gains scale with your marginal rate but are capped at 28%, short‑term gains are taxed as ordinary income (up to 37%), and additional levies (NIIT) and state taxes can push the effective rate higher—confirm product structure and holding period before you trade [1] [3] [2].
If you want, I can compile a checklist of the specific fund/product structures to watch (grantor trust vs. futures vs. mining equity) and sample tax math for several income brackets.