Arkansas, known as "The Natural State," boasts a rich history of gemstones and minerals, including diamonds from the Crater of Diamonds State Park. While diamonds have their allure, many Arkansans today are turning their attention to gold as a promising investment opportunity.
Before diving into the world of gold investment, you should be well-versed with both federal and state regulations. The IRS has specific guidelines concerning capital gains tax on gold, and Arkansas has its unique tax implications for gold purchases.
If you're considering buying gold online or investing in silver, start by exploring a reputable precious metal dealer's website. Here, you can peruse a variety of gold, silver, and other precious metal products. In certain cases, you might need to engage with a representative to set up an account and decide on the precious metals you wish to buy.
When you decide to sell your gold or other precious metals, be prepared to face the federal capital gains tax imposed by the IRS. This is because the IRS views precious metal investments as capital assets, categorizing them as collectibles. If you've held onto your precious metals for over a year before selling, you'll be liable for this tax.
The capital gains tax aligns with your marginal tax rate, capping at 28%. Depending on your income bracket, the capital gains tax rates can be 0%, 15%, or 20%. Here's a detailed breakdown of the capital gains tax rates for 2023:
|Single||Up to $44,625||$44,626 to $492,300||Over $492,301|
|Head of household||Up to $59,750||$59,751 to $523,050||Over $523,051|
|Married filing jointly||Up to $89,250||$89,251 to $553,850||Over $553,851|
|Married filing separately||Up to $44,625||$44.626 to $276,900||Over $276,901|
If you're thinking of opening a precious metals IRA, ensure your assets adhere to IRS guidelines. The IRS has stringent rules about the kinds of precious metals permissible in an IRA:
In Arkansas, precious metal investors are not subject to sales tax when they invest in gold and silver. In 2021, the state exempted coins, currency, and precious metal bullion from sales tax charges.
The exemption applies to gold and silver, including refined bullion that is stamped with its weight and purity and valued based on its metal content.
Gold coins typically weigh one to two ounces; however, half-ounce and quarter-ounce coins may also be available at some dealers. Gold coins also come in varying qualities, with older minted coins containing 90% to 92% gold and newer coins containing 99.9% gold. Some reputable gold dealers also sell alloyed gold coins, which contain 91.7% gold, with the remainder being made up of silver or copper.
The gold coin price is often based on the size and gold content. However, some coins can cost more than the gold spot price based on rarity, demand, and design elements.