If you sell coins or bullion in the US, you are probably going to owe federal income tax on the gain. Most sellers either misunderstand the rules and overpay, ignore the rules and risk an IRS audit later, or get good advice once and apply it forever. This post covers the basics every collector should know. It is educational, not personalized tax advice; consult a CPA before making decisions about your specific situation.
Coins and bullion are "collectibles"
The IRS classifies coins, bullion, gemstones, and most numismatic items as "collectibles" under Internal Revenue Code Section 408(m). This matters because the long-term capital gains rate on collectibles is capped at 28 percent, not the lower 15 or 20 percent rate that applies to stocks and most other long-term capital assets.
A few exceptions for what counts as collectibles:
- Gold and silver American Eagle coins, when held as bullion, are still collectibles for income-tax purposes despite their legal-tender status. Same 28 percent rate.
- Gold and silver ETFs that hold physical metal (like GLD or SLV) are also taxed at the collectibles rate, even though you held them in a brokerage account. The shares represent a beneficial interest in the underlying metal, which is the collectible.
- Mining stocks (companies that produce gold and silver) are normal equities and taxed at standard long-term capital gains rates.
If your effective federal rate on collectibles gain would be less than 28 percent based on your other income, the lower rate applies. The 28 percent is a ceiling, not a floor.
Long-term versus short-term
The 28 percent collectibles rate applies only when you held the coin for more than one year before selling. If you sell within a year, the gain is short-term and taxed at your ordinary income rate, which can be as high as 37 percent federally for top earners.
The holding-period clock starts the day after you bought the coin and ends the day you sold it. Inherited coins are automatically considered long-term, regardless of how long the heir holds them; the holding period of the deceased plus the holding period of the heir count as one continuous holding for collectibles inherited at death.
Basis: what you paid plus expenses
Your taxable gain is the sale proceeds minus your basis. Basis is generally what you paid for the coin, plus certain costs of acquisition (sales tax, shipping in, dealer markup, grading fees if those grading fees were necessary to make the coin saleable).
Two important nuances:
1. Basis tracking is your responsibility. The IRS will not look up what you paid for a coin in 1992. If you cannot prove your basis with receipts or contemporaneous records, the IRS can assert a basis of zero, which means the entire sale price is gain.
2. Step-up in basis at death. Coins inherited from a deceased owner get a basis equal to the fair market value on the date of death, not the deceased's original purchase price. This is the most important rule for heirs to understand. A Morgan dollar your grandfather paid $5 for in 1955 and you inherit at $200 has a basis of $200. If you sell it for $220, your gain is $20, not $215.
What auction houses report
When you sell coins through an auction house or consignment platform, you may receive a 1099 form from them at year-end if your annual proceeds exceed certain thresholds.
The most relevant forms:
1099-NEC (Nonemployee Compensation). Issued by a payer when nonemployee compensation paid in a calendar year is $600 or more. Some auction houses treat consignment payouts as nonemployee compensation reportable on 1099-NEC. USCNE issues 1099-NEC to consignors whose annual settlement payouts total $600 or more.
1099-K (Payment Card and Third-Party Network Transactions). Issued by payment processors (Stripe, PayPal, etc.) when they process payments to a payee's account. The threshold has been changing as the IRS phases in lower thresholds; as of the 2026 tax year you should expect to receive a 1099-K from a payment processor that handled $5,000 or more on your behalf. The proposed final threshold is $600 but implementation has been delayed multiple times.
You may receive both forms in the same year for the same income. The two forms report from different perspectives (the payer and the payment processor), and your CPA will reconcile to avoid double-counting.
USCNE does not issue 1099-MISC. We use 1099-NEC because the IRS retired 1099-MISC for nonemployee compensation reporting in 2020.
Sales tax versus income tax
Sales tax and income tax are separate. When you BUY a coin, the dealer or platform may charge sales tax depending on your state's rules. When you SELL a coin, you do not collect sales tax (the buyer's platform handles that, if applicable), but you may owe income tax on any gain.
A few states (Nebraska included, as of 2026) have specific exemptions for sales of investment-grade bullion and certain coin transactions. These exemptions affect sales tax only, not income tax. The federal 28 percent collectibles rate applies regardless of state.
Reporting on your tax return
Coin and bullion sales are reported on IRS Form 8949 (Sales and Other Dispositions of Capital Assets), which feeds into Schedule D of your Form 1040. Each transaction with a different basis or holding period is its own line item.
If you received a 1099-NEC from a consignment platform, the IRS will receive the same form and will match your reporting against it. Failing to report 1099-NEC income is a common audit trigger.
If you have many transactions (junk silver dealers selling thousands of dimes), the IRS allows aggregated reporting on Form 8949 Schedule D Part I or II as long as you can produce per-transaction records on request.
Losses
You can claim a capital loss if you sell a coin for less than your basis. Capital losses on collectibles offset capital gains on collectibles first, then up to $3,000 per year against ordinary income. Unused losses carry forward indefinitely.
The most common scenarios where collectors realize losses are:
- A grading downgrade on resubmission (you bought as MS-65, you resubmit and the slab comes back MS-64, you sell for the lower-grade price)
- A market decline in a series you bought at a peak
- An authenticity issue (the coin you thought was real turns out to be a clever counterfeit)
In all three cases, the loss is real, and you can claim it as long as you can document basis and proceeds.
Self-directed IRAs
You can hold certain bullion coins (American Eagles, American Buffalos, Canadian Maple Leafs, and select others) in a self-directed IRA. The custody and storage requirements are strict; you cannot hold IRA bullion in your home safe. Custody has to be with a qualified IRA custodian using an approved depository.
Numismatic coins (graded collectibles, rare dates, anything with significant premium over melt) are generally not allowed in IRAs. Marketers selling "IRA-eligible" rare coins are usually selling either non-eligible coins (the IRA custodian will reject the purchase) or government bullion at heavy markups. Be skeptical of unsolicited pitches.
Keeping good records
The most useful tax-related habit a collector can build is keeping a transaction log. One row per coin purchase, one row per coin sale, with date, price, fees, and a brief description. A spreadsheet works fine. Update it as you transact.
When tax time comes, your CPA can produce Form 8949 entries from your spreadsheet in minutes. Without it, they will either guess (badly) or charge you several hundred dollars to reconstruct.
How USCNE handles tax reporting
If you consign coins through USCNE and your settlements for the calendar year total $600 or more, you will receive a 1099-NEC from us at the end of January documenting your nonemployee compensation. The form will use the name and address from your consignor profile and the TIN from your W-9 on file. We will provide a year-end statement showing per-settlement detail so you can reconcile against the 1099-NEC line.
We also support consignors who want a CSV export of all their settlements for the year, formatted for direct import into TurboTax, H&R Block, or your CPA's preferred software. Ask your operator contact for the export at any point during the year.
Bottom line
Treat your coins as taxable property, document your basis from day one, expect a 1099 if you cross thresholds, plan for the 28 percent collectibles rate on long-term gains, and build a CPA relationship before you need it. The federal rules are not complicated once you know them. They are punishing if you ignore them.
This post is general education, not tax advice for your specific situation. Consult a CPA before making decisions that affect your taxes.