Do You Have to Report Gold Purchases?

Certain rules and thresholds trigger reporting requirements for gold transactions. The reporting landscape involves not just the act of buying, but also selling and holding gold, with obligations falling on different parties depending on the transaction.

The Buyer’s Reporting Responsibility

For most gold purchases, the buyer has no reporting responsibility to the Internal Revenue Service (IRS). When an individual buys gold bullion or coins from a dealer using a personal check, credit card, or bank wire, the transaction is considered private. No special forms are required from the buyer at the time of purchase.

A gold purchase is the acquisition of a capital asset, not an income-generating event, so no immediate reporting duty is created for the buyer. The buyer’s responsibility is to track their cost basis, which is the total amount paid to acquire the gold, including any commissions or fees. This information is necessary to calculate taxes when the gold is later sold.

Dealer Reporting of Large Cash Transactions

The situation changes when large amounts of cash are used for a purchase. In this scenario, the reporting duty falls on the gold dealer, not the buyer. Federal anti-money laundering regulations require any business to report the receipt of more than $10,000 in cash in a single transaction or in related transactions.

The dealer fulfills this obligation by filing IRS Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, within 15 days of the transaction. This form requires details about the person who provided the cash. For this rule, “cash” includes physical currency, as well as cashier’s checks, money orders, and bank drafts with a face value of $10,000 or less. A cashier’s check for more than $10,000 is not considered “cash” under this rule, as the issuing bank has separate reporting requirements.

The rule also covers related transactions. For instance, if a buyer makes two cash purchases from the same dealer within 24 hours that total more than $10,000, the dealer must file the form. The dealer is also required to provide a written statement to the customer by January 31 of the following year, notifying them that a report was filed.

Tax Reporting When You Sell Gold

Reporting requirements for an individual investor primarily arise at the time of sale. The IRS classifies physical gold as a “collectible,” and any profit from its sale is subject to taxation. If you hold the gold for more than one year, the long-term capital gains are taxed at a maximum rate of 28%, which is higher than the rates for assets like stocks.

To calculate your taxable gain, you subtract your cost basis from the sale proceeds. This gain or loss is reported on Form 8949, Sales and Other Dispositions of Capital Assets, with the totals then transferred to Schedule D of your tax return. Accurately reporting your cost basis ensures you only pay tax on the actual profit.

In some cases, the dealer you sell to also has a reporting obligation. For certain sales, the dealer must file Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, which reports the gross proceeds to you and the IRS. This form is triggered by the sale of at least one kilogram (32.15 troy ounces) of gold bars or at least 25 one-ounce gold coins like Gold Maple Leafs or Krugerrands. Receiving a Form 1099-B simply alerts the IRS to the transaction; you are still responsible for reporting your cost basis to determine your actual taxable gain.

Requirements for Foreign Gold Holdings

U.S. citizens who hold gold outside the United States are subject to separate reporting rules. These regulations are designed to combat offshore tax evasion and require the disclosure of foreign assets. The requirements are tied to holding the asset, not just buying or selling it.

The Report of Foreign Bank and Financial Accounts (FBAR) must be filed as FinCEN Form 114 if the total value of all foreign financial accounts exceeds $10,000 at any time during the year. Gold is reportable on an FBAR if it is held in a “financial account,” such as with a foreign financial institution. Physically holding gold directly in a private safe deposit box not managed by a financial institution generally does not trigger an FBAR filing for that asset.

A separate requirement is IRS Form 8938, Statement of Specified Foreign Financial Assets, filed with your tax return if your foreign assets exceed certain thresholds, which vary by filing status. For an unmarried individual in the U.S., the threshold is over $50,000 in assets on the last day of the tax year or over $75,000 at any time during the year. Similar to the FBAR, directly held physical gold is not reportable on Form 8938, but gold held in a foreign financial account is. Interests like certificates representing gold ownership issued by a foreign person are also reportable.