Platinum and Palladium: Tax Rules and Rates

Platinum and palladium are classified as collectibles for federal income tax purposes, the same as gold and silver. That classification drives the tax rate on gains, the rules for retirement accounts, and the reporting thresholds. The practical experience differs from gold in one significant way: the products that qualify for favorable treatment are fewer, and the reporting thresholds are written in quantities and product names that do not match the typical bar or coin purchase. This page explains the federal rules and where the practice diverges from gold.

How Gains Are Taxed

Gains on the sale of platinum or palladium are capital gains. If the metal was held for one year or less, the gain is short-term and taxed at ordinary income rates. If held longer, the gain is long-term and taxed at the collectibles maximum rate, which is 28%. That rate is set by statute and has changed before; it applies to the gain, not the total sale price. The gain is the difference between the sale proceeds and the adjusted basis, which is generally what was paid plus any allowable costs.

For example, if a bar was bought for $1,000 and sold for $1,500, the gain is $500. The 28% rate applies to that $500, not the $1,500. The same calculation applies to gold and silver, but the product rules differ.

What Qualifies as Bullion

The IRS defines bullion for this purpose as coins or bars that are made of platinum or palladium and are of a purity of at least 99.5%. Coins that meet this standard include the American Platinum Eagle, the Canadian Maple Leaf, and the Austrian Philharmonic, among others. Bars that meet the purity standard also qualify. However, not all platinum or palladium items are bullion. Jewelry, industrial products, and coins that do not meet the purity threshold are not bullion and are taxed as ordinary capital assets, which may mean a different rate.

One notable difference from gold: the American Gold Eagle is explicitly treated as bullion even though its purity is 91.67%. No similar statutory carve-out exists for platinum or palladium. The Platinum Eagle meets the 99.5% standard, so it qualifies, but the rule is not identical. For palladium, there is no widely available bullion coin from the U.S. Mint; the Canadian Maple Leaf and other foreign coins are the common options.

Reporting Thresholds

Sales of platinum and palladium are reported to the IRS by the dealer when the transaction meets certain thresholds. There is no dollar threshold anywhere in this rule, for any metal — that is the misunderstanding worth clearing first. The trigger is a quantity of a particular product. For platinum bars, a dealer files a Form 1099-B at 25 troy ounces or more; for palladium bars, at 100 troy ounces. Gold and silver work the same way: gold bars at 1 kilogram or 100 troy ounces, gold coins only at 25 or more Maple Leafs, Krugerrands or Onzas, silver bars at 1,000 troy ounces, and silver coins at $1,000 in face value of pre-1965 US 90% coin. The practical consequence runs the opposite way to what most people expect: a single Platinum Eagle or Gold Eagle worth several thousand dollars triggers nothing at all, because neither coin is on the list at any quantity.

The reporting threshold is not a tax. It is an information return. The IRS uses the 1099-B to match the sale to the taxpayer’s return. Underreporting a sale that was reported by the dealer is a common audit trigger. The threshold is not a suggestion to sell just under it; structuring sales to avoid reporting is illegal and can result in penalties.

Retirement Accounts

Platinum and palladium can be held in a self-directed IRA, but the rules are strict. The metal must be held by a qualified custodian, not by the account owner. The custodian must be a bank or a non-bank trustee approved by the IRS under Treasury Regulation 1.408-2(e), and the metal must stay in its possession; the IRS approves trustees, not depositories. The account owner cannot take physical possession of the metal without triggering a distribution, which is taxable and may be subject to penalties.

The IRS prohibits the IRA from acquiring collectibles, but it allows certain precious metals, including platinum and palladium, as long as they meet the purity standard. The same 99.5% purity rule applies. The metal must be in the form of bullion or a coin that meets the standard. The custodian is responsible for ensuring the metal meets the requirements. The account owner cannot direct the custodian to buy a specific coin that does not meet the standard.

A common misconception is that an IRA can hold any coin. That is not true. The IRS has a list of approved coins, but for platinum and palladium, the rule is the purity standard, not a list. The custodian will typically have a list of approved products, but that list is not the IRS rule.

Sales Tax

Sales tax on the purchase of platinum and palladium is set by each state. Some states exempt bullion from sales tax, others do not, and the exemptions change by legislative session. For example, a state may exempt coins but not bars, or exempt purchases over a certain amount. The reader must check the rules in their own state for the current year. This site does not track state sales tax changes.

What People Get Wrong

The most common mistake is assuming that platinum and palladium are taxed the same as gold in every respect. The classification is the same, but the product rules differ. For gold, the American Gold Eagle is statutorily treated as bullion even though it is not 99.5% pure. For platinum, the Platinum Eagle meets the purity standard, but there is no special rule. For palladium, there is no U.S. coin that qualifies, so the options are foreign coins or bars.

Another mistake is assuming that the reporting threshold is a tax. It is not. It is a reporting requirement. The threshold is $1,000 for platinum and palladium, but it applies to any bullion, not just specific products. That means a sale of a one-ounce Platinum Eagle will be reported, and the IRS will expect to see the gain on the return. A sale of a one-ounce Gold Eagle is also reported, but the rule is product-specific.

A third mistake is assuming that an IRA can hold any platinum or palladium product. The purity standard is strict. A coin that is 99% pure does not qualify. The custodian will reject it. The account owner must ensure the product meets the standard before directing the purchase.

Comparison: Platinum/Palladium vs. Gold

The table below compares the federal tax treatment of platinum and palladium with gold, and shows where the rule does not apply.

Getting Professional Advice

The rules in this article are a summary. Tax law is complex and changes. The reader’s own situation depends on their basis, holding period, state of residence, and other factors. A CPA or tax professional can provide advice for an individual case. This site does not provide personal tax advice.