South Dakota, home to the historic Black Hills Gold Rush in the late 19th century, has a rich history intertwined with the allure of precious metals. Today, residents of Mount Rushmore State continue to see the value in investing in gold as a safeguard against economic uncertainties.
That’s why many South Dakota residents choose to invest in gold and buy precious metals for long-term growth. Many also invest in silver, platinum, and palladium to diversify their portfolios.
If you want to invest in gold online, you should understand both federal and state-specific regulations. While the IRS has set guidelines on capital gains tax for gold sales, South Dakota has its own tax implications for purchasing precious metals.
When you sell gold or other precious metals, the IRS mandates that you pay capital gains tax on any profit. Precious metals are deemed capital assets and are categorized as collectibles. If you've held onto your gold for more than a year before selling, you'll be subject to this tax.
The capital gains tax aligns with your marginal tax rate, capped at 28%. Depending on your income, the rates are 0%, 15%, or 20%. Here's a 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|
For those interested in opening a precious metals IRA, you must know which assets are IRS-approved. The IRS has stringent criteria for the types of metals permissible in an IRA:
In South Dakota, there is a statewide sales tax of 4.5%. However, in some counties and cities, this rate can reach 6%. Luckily, not all precious metals are subject to this sales tax. In some cases, you may be exempt from the state sales tax when you buy silver, gold, or other precious metals.
If the asset is considered legal tender in the U.S. and internationally, and if it is classified as a precious metal coin or bar, the state does not impose a sales tax.
Gold bars are available in different sizes, from a few grams to 10 ounces. Their price is primarily based on their gold content and purity. Each gold bar is stamped with its weight, purity, and serial number.
Gold bars can be categorized as: