Tax Reporting Requirements for Bullion Transactions
The information provided herein is for educational purposes only. It is not intended to serve as financial or tax advice. Jewelry & Coin Mart advises its clients to consult their tax professionals regarding their financial or tax situation.
There are circumstances in which precious metals dealers are required by law to report consumer transactions to the IRS:
- When consumers sell reportable quantities of specific bullion or coins, they must adhere to certain reporting requirements.
- The same applies when a consumer purchases goods from a dealer and pays $10,000 or more in cash.
- If you pay by check or bank wire, this does not apply.
- If transaction # 1 or # 2 is confirmed, then a Form 1099-B, in accordance with IRS guidelines for all reportable transactions, is completed on the client's behalf. This information remains strictly confidential between us and the IRS; at no point will any third party have access to their private information.
Bars and Rounds
The purity and quantity of the individual products primarily determines the reporting criteria for customers' bar and round sales. However, these criteria differ for each kind of precious metal.
For sales of gold bars and rounds to be considered reportable, every piece of bullion must have a fineness of at least .995, and the total purchase quantity must be 1 kilo (32.15 troy ounces) or more. Similarly, for sales of silver bars and rounds to warrant reporting, each silver piece needs to possess a fineness of at least .999 with a total purchase quantity of 1,000 troy ounces or more.
Lastly, sales of palladium and platinum bars or rounds require minor qualifying quantities of 100 troy ounces and 25 troy ounces, respectively. The fineness restriction for both metals is .9995.
Coins
When compared to bars and rounds, the reporting criteria for coin sales by customers is more straightforward since the restrictions are so specific. There are only a few coins that are required to be reported to the IRS. Reportable coins include the following:
- 1 oz Gold Maple Leaf (minimum of 25 coins)
- 1oz Gold Krugerrand Coins (minimum of 25 coins)
- 1 oz Gold Mexican Onza (minimum of 25 coins)
- US coins composed of 90% silver (i.e., pre-1964 silver coins)
- We are required by law to report any sales of the above-mentioned gold coins in which more than 25 pieces have been sold.
- We must report sales of 90% silver content US coins minted before 1964 and any gold coins if more than 25 pieces are sold. Certain bullion products are exempt from reporting, including Gold or Silver American Eagle Coins and certain foreign and US currency. Gold or Silver American Eagle Coins; any pieces of foreign currency that were not explicitly mentioned in the IRS's Reportable Items List, as well as pieces of US currency that were created subsequent to the list's creation in the 1980s.
Any dollar amounts that do not reach the reporting limit are subject to the user's discretion, and you may want to talk to your Tax professional.