Precious Metal IRS Reporting Requirements
The IRS has specific reporting requirements for taxpayers who engage in transactions involving precious metals, including collectible coins and gold bullion. Find full details about the forms you need to submit based on your activities in this guide.
Form 8300
Form 8300 is part of the U.S. government’s effort to combat money laundering, and whenever a trade or business receives payment of more than $10,000 in cash or cash equivalents in one transaction, or in two or more related transactions, the dealer must file the form. Transactions are considered related even if they occur over a period of more than 24 hours if the recipient knows, or has reason to know, that each transaction is one of a series of connected transactions. Precious metal, gem and coin dealers, jewelers, etc., are subject to these rules.
Cash
For purposes of Form 8300, cash is defined as:
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U.S. and foreign coin and currency received in any transaction; or
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A cashier’s check, money order, bank draft, or traveler’s check having a face amount of $10,000 or less that is received in a designated reporting transaction, or that is received in any transaction in which the recipient knows that the instrument is being used in an attempt to avoid the reporting of the transaction under either section 6050I or 31 U.S.C. 5331., Note: Cash does not include a check drawn on the payer’s own account, such as a personal check, regardless of the amount.
“ Example - Don, an individual, buys gold coins from Max, a coin dealer, for $13,200. Don tenders payment to Max in the amount of $6,200 cash and a cashier's check in the face amount of $7,000, which Don had bought. Because the sale is a designated reporting transaction, the cashier's check is treated as cash. Therefore, because Max has received more than $10,000 in cash with respect to the transaction, Max must complete and file the Form 8300 for the transaction. ”
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Form 8300 requires the name, SSN and contact information of the individual making the payment.
Form 1099-B
A sale of a precious metal (gold, silver, platinum, or palladium) in any form for which the Commodity Futures Trading Commission (CFTC) has not approved trading by regulated futures contract (RFC) is not reportable on
Form 1099-B. Further, even if the sale is of a precious metal in a form for which the CFTC has approved trading by RFC, the sale is not reportable if the quantity, by weight or by number of items, is less than the minimum required quantity to satisfy a CFTC-approved RFC (2021 1099-B Instructions). For example, at the time this chapter was last updated, sales of fewer than 25 1-ounce Krugerrand or Maple Leaf gold coins or 1,000 US 90% silver dollars, do not fall under the RFC trading rules and thus are exempt from the 1099-B reporting requirements.
Sales of precious metals for a single customer during a 24-hour period must be aggregated and treated as a single sale to determine if this exception applies. This exception does not apply if the broker knows or has reason to know that a customer, either alone or with a related person, is engaging in sales to avoid information reporting.
California Differences
California taxes long- and short-term capital gains as regular income. No special rate for long-term capital gains exists.
The TCJA provision that limits Sec 1031 treatment only to exchanges of real property was adopted by California in AB 91 (signed by the governor 6/27/2019), with two significant differences: the provision only applies to taxpayers with AGI of $500,000 or more ($250,000 for those filing single or married separate) and only applies to exchanges completed after January 10, 2019. Thus, gains on exchanges of coins and precious metals that are of like-kind, and that meet the other Sec 1031 requirements and were completed January 10, 2019 or earlier would be eligible for tax deferral on the state return, as would exchanges done by taxpayers with AGI less than $500,000 ($250,000 if filing single or MFS).
California has not conformed to the suspension of tier 2 miscellaneous deductions imposed by the TCJA for 2018 through 2025. Therefore, investment expenses such as those related to ETFs would be deductible on the state return, provided the total of miscellaneous deductions exceeds 2% of the federal AGI.