Selling Gold in Texas: Federal Taxes, Reporting and the IRA Difference

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What actually happens when a Texan sells gold

The tax outcome when a Texas resident sells gold depends on two facts and two facts only. First, the wrapper: is the metal held personally, or is it inside a self-directed IRA? Second, the holding period: was the metal held one year or less, or more than one year?

Every path lands on federal tax alone. Texas has no state personal income tax and no state capital gains tax under Article 8 Section 24 of the Texas Constitution. A seller in Houston pays no more state tax than a seller in Amarillo. Both pay zero to the state.

Personally held physical gold sits in the collectibles regime. A long-term gain is taxed federally at up to 28 percent under Internal Revenue Code section 1(h)(4). A short-term gain is taxed as ordinary federal income at up to 37 percent for tax year 2026.

Metal held inside a self-directed IRA sits outside that regime. The account owner is the IRA trust. The trust sells the coin or bar to the dealer, the custodian receives the cash, and no taxable event lands on your return. Tax applies later, when cash actually leaves the IRA as a distribution.

Chart: top federal tax rate by sale outcome

The chart below shows the top federal tax rate applied to five common sale outcomes for a Texas resident. The 28 percent collectibles rate only appears on long-term physical gold gains outside an IRA. Traditional IRA distributions run through the ordinary income table. Roth qualified distributions land at zero. The state line runs zero across every case.

Two structural observations sit inside the chart. First, the wrapper matters more than the metal. The same coin sold in the same market can carry a 28 percent, 37 percent, or 0 percent federal rate depending on where it was held. Second, the Texas state line is flat and empty for every outcome, which is the wedge for a Texas retiree deciding where to put a retirement dollar.

The federal collectibles rate on physical gold

Internal Revenue Code section 1(h)(4) sets a special maximum tax rate on the long-term gain from selling a collectible. Bullion coins and bullion bars are treated as collectibles for capital gains purposes even when they meet the fineness required for an IRA under section 408(m)(3). The rate is a ceiling of 28 percent on the long-term gain.

Two mechanics sit under that ceiling. The 28 percent figure is a maximum, not a flat. If your ordinary income tax bracket is below 28 percent, the collectibles gain is taxed at your bracket. If your bracket is at or above 28 percent, the collectibles gain is capped at 28 percent.

Long-term means more than one year of holding. The clock starts on the day after the metal was acquired and ends on the sale date. A coin bought September 10, 2024 and sold September 11, 2025 crosses one year and one day, which qualifies for the long-term rate. Sold on September 9, 2025, the gain is short-term.

Losses within the collectibles class can offset gains within the collectibles class first. Excess losses flow up to the standard capital loss ordering rules on Schedule D. A tax advisor familiar with Form 8949 category coding can confirm the entries before you file.

Short holding periods and ordinary income

Gold held one year or less is taxed at ordinary federal income tax rates on the gain. There is no preferential rate at all. For tax year 2026, the ordinary income table runs from 10 percent up to a top rate of 37 percent. The top rate applies to taxable income above roughly 626,350 dollars for a single filer and 751,600 dollars for a married joint filer.

A quick sale after a rapid price move can therefore land at 22, 24, 32, or 37 percent depending on total taxable income. Texas adds nothing on the state side. That does not remove the federal exposure, which is often larger on a short-term sale than the 28 percent collectibles ceiling would be if the metal were held longer.

Timing matters. If the sale falls before the one-year anniversary by a few days, waiting to cross that mark can flip the rate from an ordinary bracket into the 28 percent collectibles ceiling. The right choice depends on your bracket and whether the gain is a gain or a loss.

What the dealer reports: Form 8300 and Form 1099-B

Two federal forms shape the paper trail when a Texas resident sells gold to a dealer. They do not overlap. One tracks how the dealer was paid. The other tracks what was sold.

Form 8300 covers cash received by the dealer. Any trade or business that receives more than 10,000 dollars in cash from one transaction, or from two or more related transactions, must file Form 8300 with the IRS. The filing is due within 15 days of receiving the payment. This rule sits in the Bank Secrecy Act and the IRS instructions confirm the threshold and the timing.

Cash for Form 8300 means physical currency and, for a designated reporting transaction, cashier's checks, bank drafts, traveler's checks, and money orders each valued at 10,000 dollars or less. A personal check drawn on the customer's own bank account is not cash under this rule. Bank wires and ACH transfers are not cash either.

Form 1099-B covers dealer buybacks of certain items. When a customer sells gold to a Texas dealer, the dealer files Form 1099-B only if the item and the quantity match a Commodity Futures Trading Commission approved regulated futures contract. The IRS instructions for Form 1099-B include a dedicated Sales of precious metals rule that states the reportable class narrowly.

Three tests must all be met for a reportable dealer buyback. The item must be a precious metal in a form the CFTC has approved for delivery on a regulated futures contract. The seller must sell in a single transaction or related transactions. The quantity must meet or exceed the minimum required to satisfy that CFTC contract.

Table: which items trigger dealer 1099-B

The table below lists the item classes and quantity thresholds that trigger a dealer 1099-B filing when you sell to the dealer. The thresholds come from the CFTC-approved regulated futures contract specifications referenced in the IRS instructions for Form 1099-B. Items outside the list are not reportable at any quantity.

Two takeaways sit inside the table. First, the small retail seller in Texas is almost always outside the 1099-B net. A five-coin American Gold Eagle sale to a Houston dealer is not reportable at any dollar amount. Second, a large bar sale can trigger the form. A single 1 kilogram gold bar meets the threshold on its own; two 500 gram bars in one transaction meet it together under the related-transactions rule.

The absence of a 1099-B does not remove your obligation to report a gain on your own federal return. A sale at a gain is still a gain on Schedule D and Form 8949 whether the dealer filed a form or not. Under-reporting on the assumption that no form was filed is a compliance risk that outlives the transaction.

The IRA difference: selling inside the wrapper

The account structure changes the tax outcome fundamentally. When the metal sits inside a self-directed IRA, the owner is the IRA trust and the individual is the account beneficiary. Under Internal Revenue Code section 408, transactions inside a qualified IRA are not taxable events for the account owner as long as the metal never leaves the IRS-approved depository into personal possession.

A gold IRA sale runs through the custodian. The account owner submits a sale instruction, the dealer wires the sale proceeds to the custodian, and the custodian credits the account. No 1099-B is filed on the sale because the seller is the IRA trust rather than the individual, and no 28 percent collectibles rate applies for the same reason.

Two federal rules make the IRA path clean. First, Internal Revenue Code section 408(m)(3) allows IRA-eligible bullion and coins as an exception to the general collectibles prohibition. Second, IRS Publication 590-B confirms that gains inside a traditional IRA are tax-deferred and that qualified Roth distributions are federal tax-free after age 59 and a half with a five-year seasoned Roth.

The tradeoff is that the cash stays inside the IRA. If you want the cash in your bank account, you take a distribution. That is the point where federal tax lands on a traditional IRA. A Roth qualified distribution avoids federal tax on both the growth and the sale proceeds together.

Turning IRA gold into cash: distributions

A distribution from a gold IRA to your bank account is taxed at ordinary federal income tax rates for a traditional IRA. The 28 percent collectibles ceiling from section 1(h)(4) does not apply because the account owner is receiving cash from the IRA, not selling a coin outside the IRA. The custodian issues a Form 1099-R for the year showing the distribution amount and the tax code.

A Roth qualified distribution is federal tax-free. Two conditions must both be met: the account owner is age 59 and a half or older, and the Roth has satisfied the five-year rule from the date of the first Roth contribution or conversion. Non-qualified Roth distributions can carry tax on the earnings portion and, if before age 59 and a half, the 10 percent penalty.

An in-kind distribution keeps the coin or bar and skips the sale. The depository releases the metal to the account owner. The custodian issues a Form 1099-R for the fair market value on the release date, and the account owner reports that value as a distribution. The 28 percent collectibles rate does not apply at the moment of distribution; the fair market value is taxed as an ordinary IRA distribution.

An in-kind distribution creates a new personal basis in the coin equal to the fair market value on the distribution date. A later sale of that coin outside the IRA re-enters the collectibles regime under section 1(h)(4), and the gain or loss is measured from that new basis. Two-layer accounting matters here; keep the 1099-R showing the fair market value in your records.

Before age 59 and a half, a distribution triggers a 10 percent federal early withdrawal penalty on top of ordinary income tax. Internal Revenue Code section 72(t) lists exceptions. Common ones include qualified higher education expenses, first-home purchase up to a 10,000 dollar lifetime cap, disability, unreimbursed medical over the deduction threshold, and substantially equal periodic payments under a 72(t) schedule. Texas adds no state penalty because there is no state income tax to attach one to.

Selling metal held at the Texas Bullion Depository

The Texas Bullion Depository is a state agency located in Leander, Texas, operated under contract by Lone Star Tangible Assets LP. IRA metal held at the depository can be sold through the standard IRA workflow. The account owner instructs the custodian, the custodian instructs the dealer, and the dealer books the buyback against metal already sitting in the Leander vault.

The state IRA storage page verified August 2026 confirms that Equity Trust Company is the first custodian to work with the depository since Lone Star Tangible Assets received IRS non-bank trustee approval in 2023. A Texas gold IRA can therefore hold the metal in-state, sell it in-state, and settle the cash back into the IRA under standard federal rules.

For non-IRA metal held at the depository under a personal storage account, a sale runs through the operator and the buyer of your choice. The tax treatment then follows the physical gold rules: long-term collectibles at up to 28 percent, short-term at ordinary income rates, and Texas at zero. Confirm current sale routing and fees with the depository operator before you commit.

Texas has no state income tax

Article 8 Section 24 of the Texas Constitution bars the legislature from enacting a state personal income tax without a statewide vote of the people. That vote has not happened, and no such tax has ever been imposed. A Texas resident who sells gold pays zero to the state on the gain, whether the gain is long-term, short-term, or from an IRA distribution.

The wedge is real for a retiree stacking multiple gold sales across a retirement decade. A California resident faces state capital gains taxed as ordinary state income up to 13.3 percent. A New York City resident stacks state and city rates that push double-digit percentages onto a large gain. A Texas resident stacks nothing on top of the federal bill.

This is the state-level piece of the wedge, not the whole tax picture. The federal exposure is exactly the same in Texas as it is in California, New York, or Florida. The Texas advantage is that the federal bill is the entire bill. Confirm your position with a licensed advisor before you sign any sale ticket.

How to sell gold in Texas: the sequence

The retail sale of physical gold in Texas follows a repeatable sequence. The right steps protect your paper trail, keep the tax entries clean, and reduce the odds of a dealer paying a wide spread against you. The list below assumes the metal sits in your safe or your safe deposit box.

1. Gather the cost basis records. Pull the original invoice, the wire confirmation, and any storage receipts. Long-term collectibles gain math needs a defensible cost basis. Missing records force you to reconstruct the basis from bank records and dealer price archives.
2. Pull two written spot-plus-premium buy quotes. Ask two dealers by email for the current buy price expressed as spot price minus a named dollar or percentage spread, item by item. A verbal quote is worthless when the wire clears at a different number.
3. Confirm the payment path. Bank wire is the fastest and the cleanest paper trail. Ask the dealer whether the buyback settles by wire, by check, or by ACH. Cash payment above 10,000 dollars will trigger the dealer's Form 8300 filing.
4. Check whether the sale triggers a dealer 1099-B. A single 1 kilogram gold bar, 25 or more Krugerrand or Maple Leaf coins, or 1,000 or more troy ounces of silver bars will trigger the form. American Gold Eagles, Gold Buffalos, and Silver Eagles will not.
5. Get the buyback contract in writing before shipping. A written contract with an item list, the quoted price, the payment path, and the settlement date is the reference document if the deal is contested. Save the email chain that produced the quote.
6. Ship insured or hand-deliver. Use a carrier program that insures the full replacement value, or hand-deliver to a physical shop if the shop pays on the spot. Do not ship without written confirmation of the buy price.
7. Record the sale for your tax return. Enter the sale on Form 8949 with the correct cost basis, holding period, and proceeds. Long-term collectibles gains land on the 28 percent rate schedule. Confirm the entries with your tax advisor before filing.

Worked example: a San Antonio seller

Early-distribution penalty calculator

If your sale is inside an IRA and you are under age 59 and a half, the distribution to your bank account can trigger the 10 percent federal early withdrawal penalty. That penalty stacks on top of ordinary income tax. The calculator below estimates the federal penalty and the ordinary income tax based on the distribution amount and your marginal bracket. Texas adds zero state income tax and zero state penalty.

The output is a directional estimate, not a filing figure. Section 72(t) exceptions can zero out the penalty in some cases including higher education, first-home, disability, and substantially equal periodic payments. A tax advisor can confirm whether an exception applies before you take the distribution.

When selling gold is a bad idea

Selling gold in Texas FAQ

By the Harry’s Coins Editorial team. Last reviewed August 2026.