Because the value of gold soared to record levels while the value of many other investments plummeted, the buying and selling of gold coins became increasingly popular from early in the 2000s. The Internal Revenue Service long required taxpayers to report most gold coin sales on their tax returns,
In Publication 544, “Sales and Other Dispositions of Assets,” the IRS states that gold is a capital asset when held by a taxpayer. Any gain or loss that the individual sustains when he sells the gold is regarded as a capital gain or loss.
Taxpayers are required to report these transactions on Form 1099, where gains are reported as ordinary income. Taxes are paid to the federal government based on how long the gold was held, the initial price when the gold coins were bought and the sale price when the gold was sold