Selling silver requires that you pay Federal Taxes on the profit you make above the original purchase price, and may also trigger other reporting requirements as well. Silver falls under the Capital Gains Tax Category, and is a higher rate than is paid on stocks and bonds so it is important to be aware of. Collectibles tax is at 28% and is added in the 1040 Schedule D.
Reporting the Purchase Price
The price of purchase, used as the base for assessing capital gains profit, includes fees and commissions. If you sell within a year of purchase then your normal tax rate is used, otherwise it will be the capital gains rate (unless you would have a lower rate of taxation should the capital gains be seen as standard income, in which case the lower rate is applicable).
Selling to A Dealer
When selling to a broker, or dealer, the reporting situation is vague. If you are selling over $10,000 value of silver, in multiple transactions, over several days, but not within 24 hours, there is not a legal requirement to report your sale. However, there may be reporting requirements if the dealer feels you are trying to avoid reporting a $10,000 by taking the approach that you do (ie a string sale).
Approved Trading Assets Must Be Reported
A dealer may have to fill out the 1099-B form and send to the IRS if the silver product sold is approved for trading by the CFTC and is above the threshold to satisfy futures contracts.
Currently that includes 1000 ounces of silver and 5000 ounces of silver. In the past there were other silver futures including $1000 face value 90% silver coin bags, but these bags are no longer traded so it is unclear whether they must be reported or not.
In essence it seems that 1000 ounce and 5000 ounce bars and $1000 90% silver bags are the only silver types that should require dealer reporting, but the $1000 90% bags may be excluded from the reporting requirements.
The situation is somewhat unclear and dealers no doubt find it hard to muddle through the ambiguity in the legal requirements.