The war in Ukraine has pushed more investors into gold, which some see as a “safe haven” in volatile times, and fueled a price rally. ...
And because the IRS classifies metal coins as collectibles, ETF investors face the top 28% tax rate that applies to all collectibles when they sell shares.
The IRS outlined this thinking in a 2008 memo. (While the memo doesn’t carry the weight of official law, accountants have largely accepted its rationale, Lewis said.) ...
Stock investors generally pay one of three tax rates on their profits — 0%, 15% and 20%, the top rate — based on their income. These rates are preferential with respect to an investor’s regular income tax rates, of which there are seven (10%, 12%, 22%, 24%, 32%, 35% and 37%).
Conversely, the capital-gains tax rate on collectibles aligns with these seven [ordinary income tax] rates, up to a 28% maximum. That means an investor whose annual income puts them in the 12% tax bracket would pay a 12% tax rate on their collectibles profits; an investor in the 37% bracket would be capped at 28% on their collectibles profits.
