The Centennial State is famous for its rocky mountains and deep canyons. Colorado is the eighth largest state in the U.S. and is home to about 5.5 million people, many of whom buy precious metals for investment purposes. If you want to invest in gold and silver to grow your wealth, Colorado is the right place.
If you live in Colorado, there are multiple opportunities for you to buy gold and invest in silver. The availability of gold products has grown exponentially in recent years. Today, you can purchase gold from physical stores but also online and even open an IRA with precious metal products. But first, let’s see the governing laws and regulations for trading precious metals in Colorado.
On the federal level, individuals who sell gold must pay capital gains tax. This tax is applied to assets that have appreciated during the time they’ve been held. It is applied to assets such as real estate, stocks, bonds, and precious metal collections.
The capital gains tax rate depends on the income you make from the transaction and grows as the transaction value increases. Gold sellers typically have to pay 0%, 15%, or 20% of the transaction value, but the tax rate cannot exceed 28% of the profit. The tax is included in the seller’s annual tax return only after the sale has been finalized. Below is a breakdown of rates based on the individual’s filing status:
|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|
Back in the day, the IRS only allowed U.S. American gold coins to be included in IRAs. Today, the list of IRS-approved precious metal products has expanded to include dozens of gold, silver, platinum, and palladium products.
Gold and other coins should match the following requirements set by the IRS:
Currently, the IRS approves the following types of gold, silver, platinum, and palladium coins:
Tax liabilities on the sale of precious metals are not due at the exact time of the transaction. Instead, you must report the sale to the IRS using Schedule D of Form 1040 on your annual tax return. Depending on the type of sale, you should report to the IRS using Form 1099-B at the time of the transaction. These transactions include the sale of any of the following products:
There is generally no sales tax on precious metals in Colorado. Precious metals, such as gold, silver, or platinum that are classified as legal tender are exempt from sales tax. Legal tender refers to precious metal coins that were once or are still used as a means of exchange. For instance, most coins produced by the U.S. Mint are legal tender.
Also, no sales tax is levied on precious metals with high purity standards that are sold for investment or collection purposes. However, some numismatic coins may be taxed if they are sold at a higher price than their face value.
The cost of gold coins depends primarily on their weight, size, and gold content. Most frequently, the larger, the heavier, and the more gold content a coin has, the more it costs. However, sometimes a coin’s price may be higher than its face value due to its rarity, scarcity, design elements, and demand.Conversely, the price of gold bars is solely determined by their weight and gold content. Gold bars for sale usually don’t carry a historical or aesthetic value like coins.
Gold bars typically weigh between a few grams to a few ounces. Recently produced coins usually have 99.9% purity.
Gold bars can be of four types: