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Thread: How to Sell Gold Without Reporting It

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    Default How to Sell Gold Without Reporting It

    They're selling some if you click on the link. Just thought the info was interesting.


    Tom Cloud: How to Sell Gold Without Reporting It

    by John Rubino on December 20, 2012

    In this week’s talk with National Numismatic Associates’ Tom Cloud, he answers two big questions that confront precious metals buyers: Why are sales of some coins and bars reportable to the IRS and others not? And is it possible to buy and sell precious metals confidentially?

    Dollar Collapse: Hi Tom. So, what are you hearing from clients this week?

    Tom Cloud: A lot of people are asking for British sovereigns, Swiss francs, and Austrian coronas, coins that don’t require filing 1099s when you sell them.

    DC: The fact that some coins and bars have to be reported and some don’t seems both arbitrary and important in deciding what to buy. Could you give an overview of US precious metals reporting rules and how your clients tend to approach the issue?

    TC: Sure. When they created the Patriot Act [in 2001], the excuse was that the terrorists who blew up the Twin Towers had used pure gold and silver to finance their flight training. Whether that’s true or not, I don’t know. But the US imposed reporting requirements on sellers of 24-carat gold coins. If you sell more than 24 ounces in one year you’re required to file a Form 1099 with the IRS.

    The 24-coin threshold applies to individuals, not families. If a husband and wife buy gold under their own names, they can each sell up to 24 ounces without having to report it. But if they bought the gold jointly, for instance with a check with both their names on it, they can only sell a total of 24 ounces in any given year. If a client sells 12 in March and 13 in December, all 25 ounces have to be reported to the government. If a client comes to me and sells 12 ounces and goes to another dealer and sells 13 ounces, they have triggered the reporting requirement, and it’s their responsibility to report it. Even if they think they’re getting away with something they may not be. I’m required to keep records, so if the government calls I have to reveal them. There are several cases where coin sellers have had to pay huge penalties for trying to avoid reporting by using more than one dealer.

    Most 22-carat gold coins are exempt from Patriot Act reporting requirements, the only exception being the krugerrand.

    DC: You mentioned European coins. Why are they exempt?

    TC: There are some European coins that aren’t being made any more. Technically, people consider them to be rare, semi-numismatic coins. But some of them are actually cheaper than the major bullion coins. For example, the Austrian corona was only made from 1908 to 1915. It has .9802 oz of gold in it. If you’re out there today buying a gold eagle, you’re going to pay 5% – 6.5% over spot. But I buy Austrian coronas from a central bank as bullion coins, and can sell them at 2.75% over spot.

    Another good example is the French 20 franc coin, which was made from 1856 to 1914. It contains 0.1867 ounce of gold, so it takes 5.35 of them to equal an ounce. Fractional coins usually have very large premiums. For example, a quarter-ounce gold eagle is somewhere between 10% and 12% over melt. We’ve got French 20 franc coins at 4.5% over spot and we’re selling hundreds of thousands of dollars worth of them because they’re completely confidential. So the best buy right now is the European coins because of their combination of low premiums and confidentiality. Every major wholesaler that I deal with puts a price out trying to buy these European coins every day. There’s big demand for them.

    DC: Let’s summarize with a list of which coins are and are not reportable.

    TC: The following one-ounce gold coins are reportable beyond the 24-ounce threshold: the maple leaf, philharmonic, kangaroo, krugerrand, Mexican onza, and buffalo. All one-ounce gold bars are also reportable above 24 ounces.

    The following 22-carat gold coins are not reportable: US gold eagle, Mexican 50 peso, Austrian 100 corona, British sovereign, French 20 franc, Swiss 20 franc.

    DC: Got it. What about silver?

    TC: Silver is very easy. There are only two things. One is a full bag of junk silver which contains 715 ounces and constitutes $1,000 face value. It is reportable in the calendar year that it’s sold. The other is silver bars and coins in any combination – one-ounce, ten-ounce, 100-ounce or 1000-ounce – once the total hits 1,000 ounces. So you can actually sell more ounces in silver bars than you can of junk silver and not have to report it.

    DC: Any risk of these rules being tightened?

    TC: They tried with the health care bill provision that any transaction over $600 required a 1099, but when everybody realized that whether you bought a high-def TV at Wal-Mart or a gold bar or a car, both the buyer and seller would have to send a 1099 to the government, they dropped that rule. I don’t see anything similar on the horizon.

    http://dollarcollapse.com/precious-m...-reporting-it/
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    Default Re: How to Sell Gold Without Reporting It

    I was in the local coin shop this morning talking to the owner , he stated he reports only amounts of $10,000 or more, regardless of buying or selling. Just what are the rules, seems everyone interprets differently. IRS rules, Patriot Act rules, etc....

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    Default Re: How to Sell Gold Without Reporting It

    Quote Originally Posted by 917601 View Post
    I was in the local coin shop this morning talking to the owner , he stated he reports only amounts of $10,000 or more, regardless of buying or selling. Just what are the rules, seems everyone interprets differently. IRS rules, Patriot Act rules, etc....
    What he is referring to is a form 8300 which must be filed for any time that $10,000 or more in CASH is transferred from one party to another for a single transaction. This rule is not specific to metals and coin dealers.

    http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Form-8300-and-Reporting-Cash-Payments-of-Over-$10,000

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    Default Re: How to Sell Gold Without Reporting It

    I have a widget that my friend values. He wants to trade it for something he has that I could use. We agree to the trade. Why in the heck anyone else should be involved or think they need a cut of that transaction is beyond me.
    Taxing trade is nonsensical garbage. What govt service was used or infringed upon?

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    Default Re: How to Sell Gold Without Reporting It

    To add to the confusion, many PMs are legal US tender. I can take a junk silver dime, quarter, and half-dollar and use it for legal commerce. In this case, one must question how you can take capital gains on legal tender. I know that pre-1981 pennies and nickels have copper value that exceeds the face value of the coin. Should a lawful citizen report these as capital gains when they are cashed out? If you are bringing the case to that level, could all of us file our taxes with capital losses since the money we are paid in has lost some of it's value by the time we are ready to spend it.
    Simple: If you cash in (use in commerce) that Franklin half for the .50 value then there is no capital gain....if you sell it for more than you bought it for then there is

    If you sell $1000 worth of copper pennies for more than the $1000 then there is a gain

    If you use money that says $5 on it and buy something for $5 then there is no loss....as my father always said "Five bucks will always get you five bucks worth of gas"

    It's really not rocket science.....and....it would be a bit anal to report every barter transaction on a tax form but feel free to report away....Do you REALLY think EVERY Ebay transaction is reported??? REALLY????

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    Default Re: How to Sell Gold Without Reporting It

    so we have managed to confuse three reporting schemes - IRS, the $10,000 cash limit, and the special patriot act rules for money equivalents and bullion.

    the patriot act has special rules for bullion. that is what this guy is referring to. most investors and bullion dealers know little about these. this is what the person being interviewed is referring to.

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    Default Re: How to Sell Gold Without Reporting It

    Quote Originally Posted by Foxwoods Man View Post
    Simple: If you cash in (use in commerce) that Franklin half for the .50 value then there is no capital gain....if you sell it for more than you bought it for then there is

    If you sell $1000 worth of copper pennies for more than the $1000 then there is a gain

    If you use money that says $5 on it and buy something for $5 then there is no loss....as my father always said "Five bucks will always get you five bucks worth of gas"

    It's really not rocket science.....and....it would be a bit anal to report every barter transaction on a tax form but feel free to report away....Do you REALLY think EVERY Ebay transaction is reported??? REALLY????
    It goes a bit further than that. If I have $1.00 of pre-1965 coins with .715 oz of silver content, the market would say that at ~$30/oz it is worth ~$21.45. If I use this $1.00 in a commerce transaction, who is to say what the item is worth that I bought or the value of my "$1.00". Plus, is it reasonable for me to track every single silver quarter I have to find out what the silver value was at the time I acquired it?

    If you sell $1000 face value of nickels that would be 20,000 nickels. Do you have a clue what the copper value of each individual nickel was when you acquired it? And, do you have paperwork to back up that claim? If you bought the nickels at $1000 face value while copper was at $0.04 per nickel, can you claim a loss?

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    Default Re: How to Sell Gold Without Reporting It

    Quote Originally Posted by Rollie Free View Post
    I have a widget that my friend values. He wants to trade it for something he has that I could use. We agree to the trade. Why in the heck anyone else should be involved or think they need a cut of that transaction is beyond me.
    Taxing trade is nonsensical garbage. What govt service was used or infringed upon?

    For barter, the IRS requires both traders to assign a dollar value to the trade .............. make it ........ 1 dollar.

    If you trade (money) like an AGE for a used car declare the AGEs face value in trade .... make it ..... face value.

    The IRS has never challenged the face value of U.S. mint coins .......... think about that.

    Its when you convert your PMs back to FRNs is when you become liable for capital gains (participating in monetary inflation) and you get taxed and rightfully so.
    Last edited by minimus; 12-23-2012 at 11:19 AM.
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    Default Re: How to Sell Gold Without Reporting It

    Quote Originally Posted by minimus View Post
    For barter, the IRS requires both traders to assign a dollar value to the trade .............. make it ........ 1 dollar.

    If you trade (money) like an AGE for a used car declare the AGEs face value in trade .... make it ..... face value.

    The IRS has never challenged the face value of U.S. mint coins .......... think about that.

    Its when you convert your PMs back to FRNs is when you become liable for capital gains (participating in monetary inflation) and you get taxed and rightfully so.
    Actually, they did. Anyone else remember the story of a guy several years back who owned a business and decided to pay his emloyees in gold coins. They were making something like $5 per pay period. The IRS raided the place and prosecuted the owner (successfully, I think).

    http://heidilore.wordpress.com/2009/...in-gold-coins/

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    Default Re: How to Sell Gold Without Reporting It

    There's quite a bit of doublespeak here which has not been decided upon.

    If you do the research, precious metals carry a capital gains tax of 28%. The capital gains tax is supposedly due and payable once the PM is cashed out into US dollars. As far as I understand, the capital gains tax would still apply in most (if not all) cases, regardless of whether there was official reporting. Remember, if I have a lemonade stand and make $20 on a weekend, I am still supposed to report it as income.

    The IRS code treats trades at their dollar value. For example, if I am a contractor and I decide to trade some contracting work in exchange for a pick-up truck, I should attempt to value the cost of my work vs. the pickup truck and keep records for the transaction as if I had invoiced out my work in US dollars and was paid for it in US dollars. Then, I would report the pick-up truck's value as revenue minus my expenses to perform the work to calculate income.

    To add to the confusion, many PMs are legal US tender. I can take a junk silver dime, quarter, and half-dollar and use it for legal commerce. In this case, one must question how you can take capital gains on legal tender. I know that pre-1981 pennies and nickels have copper value that exceeds the face value of the coin. Should a lawful citizen report these as capital gains when they are cashed out? If you are bringing the case to that level, could all of us file our taxes with capital losses since the money we are paid in has lost some of it's value by the time we are ready to spend it.

    Those are just the legal issues. When you get to paperwork and enforcement, it's not hard to see why this is the power structure's biggest nightmare -- independent citizens with anonymous wealth that cannot be tracked, controlled, taxed or even reported on in smaller denominations with a dubious at best claim to tax profits on trading one form of legal tender for another.

    bb
    Last edited by bb28; 12-21-2012 at 01:33 AM.

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