Can you avoid paying capital gains tax on gold?

Gold prices have been surging, but selling it for a profit could cost you more in taxes than you'd expect. MoneyWatch: Managing Your Money Can you avoid paying capital gains tax on gold? We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. By Angelica Leicht Angelica Leicht Senior Editor, Managing Your Money Angelica Leicht is the senior editor for the Managing Your Money section for CBSNews.com, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications. Read Full Bio Angelica Leicht March 4, 2026 / 1:56 PM EST / CBS News Add CBS News on Google If you're thinking about selling your gold holdings, knowing how to reduce the tax implications is essential. Kirill Stytsenko/Getty Images Gold's impressive price surge over the past year, and over the last few months, in particular, has created a new class of investors who suddenly find themselves sitting on significant gains. With prices climbing from about $2,600 per ounce in early 2025 to today's gold price of over $5,100 per ounce, those who bought the metal just one year ago at a far lower cost are now holding assets worth over twice the original purchase price.That's good news for investors' portfolios, but it can also create an unexpected tax problem for many of them. When gold is sold for a profit, the Internal Revenue Service (IRS) generally treats that gain as taxable income. And because physical gold is classified as a collectible, it may be taxed at rates that are even higher than the long-term capital gains rates that apply to stocks.For investors thinking about selling, gifting or restructuring their physical gold holdings, understanding the tax implications is essential. While taxes can't simply be ignored, there are legal strategies investors use to reduce — and in some cases avoid — capital gains taxes on gold. So what are those approaches?Find out how to get started with gold investing today.Can you avoid paying capital gains tax on gold?It's difficult to fully eliminate capital gains tax on gold, but there are legitimate strategies that can significantly reduce your tax exposure, including the following:Use retirement accounts that allow gold exposureOne of the most effective ways to avoid capital gains taxes on gold entirely is to hold gold inside a self-directed IRA, sometimes called a gold IRA. This type of retirement account offers a legal way to shelter physical gold from immediate capital gains taxes. And, there are two main options: traditional gold IRAs and Roth gold IRAs.With a traditional gold IRA, taxes are deferred until you begin taking distributions in retirement and those withdrawals are taxed as ordinary income rather than capital gains. That means the 28% collectibles rate never comes into play. With a Roth gold IRA, contributions are made with after-tax money, and qualified withdrawals in retirement are entirely tax-free. For investors with a long time horizon, the Roth structure is particularly powerful, offering decades of compounding without any capital gains tax at the end. Diversify your investment portfolio by adding gold now.Choose gold mining stocks or non-physical gold investmentsNot every gold investment triggers the collectibles tax rate. Shares of gold mining companies are taxed like any other stock, with short-term gains taxed at your ordinary income rate and long-term gains taxed at 0%, 15% or 20% depending on your adjusted gross income. That offers investors potentially significant savings compared to the 28% collectibles rate on physical gold.Futures contracts and options on gold are also not considered physical asset investments, so the IRS treats them as ordinary capital gains with a maximum 20% rate — plus the 3.8% net investment income tax if applicable. If you want gold exposure without the tax drag, these gold investment vehicles are worth considering.Use tax-loss harvestingIf you have losses elsewhere in your portfolio, you can use them to offset gains from selling gold. If your losses exceed your gains, you may be able to deduct up to $3,000 against ordinary income, with the rest carried forward. Note, though, that while the wash-sale rule prohibits this strategy for stocks, physical gold and other precious metals aren't subject to the wash-sale rule. That means you can sell at a loss and immediately repurchase without forfeiting the tax benefit. Hold the gold long enough to qualify for long-term gainsTiming matters when selling gold. If you sell physical gold after holding it for more than one year, the gain is considered a long-term capital gain rather than a short-term one. Short-term gains are taxed at ordinary income rates, which can be significantly higher. Long-term gains on collectibles like gold can be taxed at up to 28%, but that can still be lower than the top ordinary income tax brackets. Holding your gold investments longer can therefore reduce the overall tax burden when a s