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 U.S. gold, silver and platinum coins (the American Eagle series described in 31 U.S.C. §5112(a)(7)–(10), (e) and (k)) and coins issued under the laws of any State.
• Gold, silver, platinum or palladium bullion at or above the minimum fineness required for delivery on a regulated futures contract (e.g. 99.5% gold, 99.9% silver), if in the physical possession of the IRA trustee.

The §408(m)(3) exception is narrow: it permits these items to be held in an IRA without disqualification. It does not change the collectibles rate when the item is held outside an IRA: §1(h)(5)(A) defines a collectible for rate purposes by reference to §408(m) "without regard to paragraph (3) thereof," so American Eagles and qualifying bullion held directly produce 28%-rate collectibles gain.

Exchange-traded funds backed by physical metal (SPDR Gold Trust, iShares Gold Trust, abrdn Silver ETF Trust) are grantor trusts, so shareholders are treated as owning the underlying metal; the funds report long-term gain on shares as collectibles gain.

By contrast, mining-company stock and futures contracts on metals are not collectibles. Long-term gain on mining-company shares is taxed at the regular capital-gains rates (top rate 20%); regulated futures are marked to market under §1256 with gain treated 60% long-term and 40% short-term.

Acquisition

State sales tax treatment of bullion and numismatic coins varies. Many states exempt investment bullion and coins from sales tax, some without limit and others only above a dollar threshold or for specified metals; a minority tax them at the full retail rate. Check the destination state's current rule. 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.

Third-party grading services such as the Professional Coin Grading Service (PCGS) and Numismatic Guaranty Company (NGC) 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 (e.g. Brink's, Loomis), 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. McNulty v. Commissioner, 157 T.C. No. 10 (2021), held that IRA owners who kept American Eagle coins bought through their IRA-owned LLC in a home safe received taxable distributions.

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 sales of certain bullion and coins in quantities that meet the broker-reporting rules under §6045 and Treas. Reg. §1.6045-1; many numismatic sales are not reported, but the gain is still reportable.

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 depends on the account terms; an unallocated account is generally a contractual claim on the dealer or bank rather than ownership of specific metal, which affects credit risk and may affect 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 rules for dealers in precious metals, precious stones or jewels are at 31 C.F.R. Part 1027: a dealer that purchased and sold more than $50,000 of covered goods in the prior year must maintain a risk-based AML program. Suspicious-activity reporting by these dealers is voluntary rather than mandatory, but Form 8300 cash reporting applies.

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 October 2026