Many precious metals investors have a hard time understanding the various restrictions around cash transactions related to gold and silver. Let’s debunk some of the common myths and set the record straight on what is and is not allowed for cash transactions:

Myth #1: I’m not allowed to buy precious metals with cash without the government tracking me.

The truth is that you can both buy and sell gold and silver with cash, but subject to certain restrictions. For example, when you are purchasing precious metals from a dealer, cash transactions of $10,000 or more are required to be reported on IRS Form 8300. However, when you are selling precious metals to a dealer, there are no restrictions on the medium of payment—cash, wire, check, etc. are allowed and not subject to any federal regulation.

Myth #2: If I’m selling more than 1,000 oz of silver or 25 oz of gold to a dealer, I can’t be paid in cash.

This is a common area of confusion. The 1099 rules on reporting sales of precious metals to a dealer don’t regulate the medium of payment. The various thresholds for reporting only determine when the transaction itself must be reported, but payment is allowed to be in any medium. To learn more about the 1099 rules when selling precious metals as well as which coins and bars are exempt from these requirements, read our article on 1099 rules here.

Myth #3: My US Gold and Silver coins are considered cash

The 1 Oz US Gold Eagle bears a $50 USD face value and is considered legal tender in the US. Similarly, the 1 Oz Silver Eagle has a $1 legal tender value stamped on the coin. Despite this fact, the IRS generally treats and taxes gold and silver coins as a collectible asset, not as cash. Thus, if you buy a US Gold Eagle coin for $1,000 and sell it for $2,000, that is generally a taxable transaction, not a mere exchange of currency. Some have disputed the legality of this practice, so please consult with your tax attorney or CPA for advice on any specific tax situation.