Tax Law (Questions About Taxes)/capital gains taxes

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Question
Dear Sir,
I would like to know if an individual's sale of precious metals qualifies as being exempt from capital gains taxes if this seller is in the bottom 15% of the income tax bracket.  It is my understanding that individuals who fall into this bracket do not have to pay any capital gains taxes.  Said metals were purchased over five years ago and sold this year.  If the exemption holds true in this case, would it hold true for capital gains of this type of any dollar amount? (30K, 50K, 100K?)  If there is a cap of some sort, what is it, and what percentage would this person have to pay on the remaining amount?
If a precious metals sale does not qualify as part of the lower income capital gains tax exemption, can you think of any other way, income or non-income related, that said individual might be able to get an exemption (or at least a partial exemption) on these taxes?  If not, what percentage would he/she expect to pay? (28%?)
Many thanks in advance for your time and expertise.

Answer
David,

Thanks for your question.

I hate to be the bearer of bad news, but precious metals are classified by the IRS as collectibles.  This means that they are not subject to the usual capital gain treatment, but are subjected to a 28% collectibles capital gain tax.

If the metals are sold, there is no avoiding the tax.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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