Tax Considerations When Buying and Selling 90% Silver

Key Takeaways

•Physical silver is generally treated as a collectible for federal tax purposes

•Capital gains tax applies when you sell silver for more than your cost basis

•State tax treatment varies significantly across jurisdictions

•90% silver may have specific reporting thresholds for dealer sales

•Consult a qualified tax professional for guidance specific to your situation

Important Disclaimer

This article provides general educational information about tax considerations related to 90% silver ownership. It does not constitute tax advice, legal advice, or financial advice. Tax laws are complex, change frequently, and vary by jurisdiction.

Before making any decisions about purchasing, holding, or selling 90% silver, consult with a qualified tax professional who can provide guidance specific to your situation.

Federal Tax Classification

For federal tax purposes, physical silver including 90% coins is generally classified as a collectible rather than an ordinary investment asset. This classification affects how gains are taxed when you sell. See IRS Topic 409 on capital gains for official guidance.

Understanding this classification helps frame your expectations, though specific rates and rules change with tax legislation. The collectible classification applies regardless of whether you hold bullion or 90% silver.

Your tax advisor can explain current rates and how they apply to your holding period and income level.

Capital Gains Fundamentals

When you sell 90% silver for more than your cost basis (purchase price plus associated costs), you realize a capital gain. This gain is generally subject to tax.

Your cost basis includes the purchase price plus any directly related costs. For 90% silver bags, maintain records of face value purchased, price paid, and date of acquisition.

Capital losses can occur if you sell for less than your basis. The treatment of capital losses involves specific rules that your tax professional can explain.

Holding Period Considerations

The length of time you hold silver before selling may affect tax treatment. Assets held longer may qualify for different treatment than those held briefly.

For silver investors typically planning long-term holdings, understanding the implications of your intended holding period helps with planning.

State Tax Considerations

State tax treatment of silver purchases and sales varies dramatically. Many states exempt precious metals from sales tax; others tax bullion purchases at standard rates. A summary of state precious metals tax laws provides a useful overview.

Beyond sales tax, states may have their own capital gains treatment. Your residence at the time of sale determines which state rules apply.

If you're considering a 90% silver purchase, understanding your state's treatment affects your total acquisition cost.

Reporting Requirements

Certain precious metals transactions trigger IRS reporting requirements. Dealers may be required to file Form 1099-B for specific types and quantities of transactions.

90% silver bags may have different reporting thresholds than bullion coins or bars. Rules can be complex and depend on transaction details.

Your dealer should understand applicable reporting requirements, but verify independently and consult your tax professional about your reporting obligations. For context on silver coin investing, see 90% silver coin bag investing basics.

Questions & Answers

Common questions about 90% silver coin bags answered by our editorial team.

How is 90% silver taxed when sold?

Physical silver, including 90% coins, is generally classified as a collectible for federal tax purposes. When sold for a gain, capital gains tax applies. The specific rates depend on holding period, income level, and current tax legislation. Consult a tax professional for your situation.

Do I pay sales tax when buying 90% silver?

Sales tax treatment varies by state. Many states exempt precious metals purchases; others tax them at standard rates. Some states have exemptions based on transaction size. Understanding your state's rules affects your total acquisition cost.

Are there reporting requirements for 90% silver sales?

Certain precious metals transactions trigger IRS reporting (Form 1099-B). Rules vary by product type and quantity. 90% silver bags may have different reporting thresholds than bullion. Your dealer should understand reporting requirements, but verify independently.