I have been dollar cost averaging into small quantities of gold and silver eagles for some time. If, for example, i sold an ounce of gold for a profit, how is the cost determined and how is the profit taxed? After all, gold eagles have no serial #/ ID other than the date on them so receipts seem pretty meaningless.That is, if i sell that gold eagle, wouldn't i just claim it cost the highest price i ever paid for gold? Just musing on some future time when i cash them in...I haven't done the research but there are two possibilities that come to mind. The first is that you would treat the sale like the sale of anything else, if you know the cost basis of the specific item you sold, that's what you would use, otherwise you use the cost basis of the oldest similar item.The second possibility follows the rules for sales of precious metal ETFs such as GLD and SLV. If these rules apply, you would calculate your total cost basis for all of the similar items you owned and allocate a percentage of that cost basis (weight of precious metal sold to total weight owned) to the sale.As I stated above, I haven't had to address this for a client and I haven't done any research, so I won't infer that either of these methods is correct.Ira
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