Despite Record Gold Prices, Your Holdings May be Worth Less Than You Think

Does the same tax laws apply to silver. I have phyiscal control…………no ETFs

Paying tax on gold "gains"? I suspect MANY people will just give the finger to the government and not report it. We didn't approve of (nor were we consulted about) the continuing depreciation of our dollars (they're STEALING from us); why should we pay ANYTHING for "gain" on a bet that is nothing more than an attempt to counter-balance that theft?

There is one wrinkle.

Unlike fiat currencies, which may or may not be welcomed in a foreign land, gold and silver, particularly state-backed gold/silver coins where the precious metal content can be easily verified (such as American Silver Eagles), are welcome everywhere, and probably always will be.

The trick is to take your gold and silver out of the country, sell it there, then convert the money to USDs state-side. Converting money from different currencies is a non-taxable event, therefore you should be in the clear.

I wouldn't do this myself. Instead, I'd create a company outside of the United States that didn't require capital gains taxes; there are numerous such countries, like Panama. Have that company sell your coins and then have it buy all your stuff for you (probably via check or credit card).

You should note that in the case of US coins, or rather the recent Eagle and Buffalos, when you sell them to a dealler brooker, they are not required to send you ( and the IRS) an 1099. For foreign coins they are required to send you and the IRS a 1099. Of course with the new 1099 requirement for all purchases of $600 or more from a single vendor, that may have changed. So, sell the coins on eBAy and at coin shows. Or when you travel outside the USA.

Great article! John Paulson is smarter than many people think. He just may be pouring his gold profits into real estate at the right time to reap the highest gain in buying power from gold while going for future nominal increases in the in real estate.

AGQ and DGP. What is the tax treatment on these two please. Also pls differentiate between ETNs and ETFs. TIA

The taxes being different from regular investments, is that the case for all gold coins? From what I remember, gold bullion coins were considered to have no collectible value and they were subject to the same taxes as other investments.

Great post Kevin.Agreed.

What happened to government "by the people, for the people"? Our government is no longer for the people! They continue to steal for their own selfish agenda. They not only steal with more taxes, but with devaluing the dollar. There are no longer any ethics or morals within our government. How depressing to see what our children are going to have to deal with!

Thank you for this reminder on how Uncle Sam keeps putting his hands in our pockets! I'd forgotten about his gold grab…….

A little known fact that was discovered several months ago. In the health care bill was placed a requirement that all purchase/sales transactions of $600 or more must generate a 1099. It's believed this was put in the health care bill primarily aimed at coin dealers, although it hits everyone in retail and will create a mountain of paperwork. Several coin dealers and other small businesses have expressed their concern that if they're small, they'll not be able to keep up and have to go out of business. Larger companies will be able to hire someone to do this. This IRS requirement goes into effect in 2012.

kevin, you mentioned holding GLD in an 401K or IRA, does this include ROTH IRA'S?

Since Perth mint certificate represent gold are held outside the US what is tax liability?

Does anyone know if there are taxable events like those mentioned in this article on ETF's for Silver Wheaton (SLW), i.e., that any sells by SLW rolls over to the owners of the stick?

Buy Yuan – or stocks on the Beijing, Hang Seng or Shanghai markets get out of American dollars entirely – in fact, if you can afford it emigrate to a safer country! America is going down! and Hard! The U.S. dollar is about to plummet downwards, unable to support all the paper in its name! America has only weaker exports to support its audacious position in the world today, and is constantly sharing down market-space with and ambitious and growing Asia. Europe is bankrupt if the truth were told, and the Euro is about to devalue, possibly in sync with the U.S. fiat sawbuck. Gold soars for a reason! The Western World is not meeting the challenge from Asians, in fact we are bulldozed away by it! Watch as the stable and honest to date, unmanipulated Yuan replaces the U.S. sawbuck and medium of exchange the world over – even crushing the American/Saudi sweet-heart deal for oil! China has made recent deals with sister Russia and intend all of Siberia as resource source for the new communist Empire forming from Chinese power-bases. Duck and cover! the Asians are coming! the Asians are coming!

Gold Stocks were not included in this story about IRS taxation, so we should be investing in GDX and GDXJ

The US constatution specifies only Gold & silver as lawful money!
The 16th amendment authorizing the IRS income tax was not lawfully ratified!
Which gold backed currencies like the Swiss Franc have the highest % of gold backing?

So if the dollar loses half its value, can I write it off as a loss? ;-)

This is similar to gambling where the IRS wants a piece of your profits but will not allow you to write-off your losses.

The CHANGES that everyone were looking for, voting for this new government are upon us. The wheel of fortune is still spinning, where it will stop, no one knows.
i wonder what taxes will be imposed on a sale of expensive Stamp Collections?.
We are at the edge of a cliff, should we jump or do something about it at the voting poll.
Time will tell and hope for the best.

First, I recommend you buy stock in gold and silver mining companies. Second, let's flip the bird to the IRS. Third, when the Republicans take over Ways and Mean they'd be smart to rewrite the tax laws and put IRS in its place. Lastly, it is time for an American Tax Rebellion!

Amazing and yet predictable from such a corrupt government. They did it before and they will do it again. The taxpayer bails out the banks for trillions (including European banks) and if thats not enough they want a chunk of your gold as well. Since they are criminals then i would not even deal with them. Would you pay a criminal part of your income if they demanded it? This would only work if literally millions said NO!

A couple of issues not addressed here. If you operate within a regular "C" corporate legal and tax entity structure as a personal service firm (i.e.: attorney, doctor, dentist, accountant, etc.) you face a flat 35% tax on net earnings plus do not get any special "capital gains" treatment on that type of return (or loss) on investments most commonly held for over a year or more. However, you enjoy the benefits of having (a potentially very long list of) "fringe benefits" and if you have a loss in one year you can elect to carry it back or forward to result in more or less "income averaging" that the individual did some 30 years ago.

My point: If you acquire precious metals (including "survival silver") and hold it as a "capital reserve asset" after being taxed upon the earnings that acquired it, it is essentially an asset of your corporation that can be "leveraged" with lenders and also looks exceptionally good to would-be investors as well as lenders…no sale = no tax!

Also, remember that gold bullion can be once again confiscated by the federal government just as it was back in the early 1930s, but if you hold precious metals in "monetized precious metal-content US coins" or "artifacts" like silver wear (92.5% silver; "sterling silver") eating utinsils, picture frames, serving trays, "objects de arte" sculptures, etc., are not subject to the current federal precious metals confiscation laws (which can be activated in a time of "national emergency" of course). And now you know why so many families in the Great Depression kept "the family silver" as a ready "carry value" resource and could actually spend or barter those items for essentials for their families (including not only food, but also medical care and medications, bullets, clothing, transportation-related goods-products-services, etc., etc.

In any event, sooner or later the "fiat" currency (includng not only paper money but also the so-called "sandwich coins" that commonly have little or no precious metal content and electronic money as well) now in circulation will become utterly useless as the presses keep rolling toward the "Kenyesian wonderland" of how to eliminate national debt by making the national currency of little or no value.

Pay your taxes…smart Americans don't mess with the IRS…but you are permitted by the various tax regulations and laws also to wisely plan your income and income stream sources of revenue whereby you can shelter income or otherwise minimize the "tax bite" on the "income"…I highly you recommend that you do your homework and visit your tax professional very very soon after the November 2nd national election.

One final matter: That 1099 matter for all transactions over $600 CUMULATIVE BUSINESS IN A SINGLE TAX YEAR won't be such a hassle for those who do all their business through credit cards! The credit card companies actually ALREADY file the information "for you" to the IRS…isn't THAT just great(?)!

One final food for thought for you all to "chew" on: What if Barrack Hussein Obama is the LAST American president under the current U.S. Constitution? Look into it and then consider the question and what it means to you as an American NOW before you go to the polls in November.

At least all food for thought, is it not?

Respectfully submitted,

Thomas Avery Blair, Enrolled Agent

folks stop being coy roy and get off your dead butts and do something to stop this gang of international scum bags from stealing our country from us and stop whining about "well what can i do about it"???

our forefathers did not sit on their dead butts, they fought in deplorable conditions and risked their lives and their wealth to give you a nation free of the scandless scum bags now taking away our rights and our very way of life. and you continue to vote into power over you the low life politicians that is draging us into the muck.
stand up and tell the rotten politicians that we will not take it anymore !!!!
i am not a tea party member , but i think like one.and maybe you should also.

Persons looking to sell their gold jewelry to cash in should make sure they understand how much pure gold their jewelry pieces contain and keep up with current prices to get the best deal when selling to a gold buyer. Some buyers will only offer a low percentage (30% – 40%) of the actual pure gold value to an uninformed seller. Let the buyer beware!

A legitimate buyer should offer a high percentage of the actual pure gold value (80% – 90%).

Their is a great Android Application on the Android Market that will calculate what your jewelry is worth in real time called "Gold Value Calculator". It is a free app. It helped me know what my gold pieces where worth when I recently sold them to a gold buyer.

whiskey tango foxtrot

What would be the best gold and silver mining stocks to buy? Stocks or ETF's? Can anyone name specific stocks that haven't topped out yet?

Now, to the matter at hand. I have been saying for two years that, "The Big Dog is going down."
It really aggravates my friends on both the right and the left; many of which are still in denial.
Worse still, we have financially raped our children and grandchildren, and stolen their future. The American Dream is Dead! Our Government, Wall Street, and Big Business has literally eaten our lunch! Suspect that many of us we be eating more rice and beans, and beans and rice, before it's all over. Ok, throw in the Mac & Cheese as well.

You folks must know by now that the gap between the rich and poor in this Country has been widening for 30 years. Today, the disparity is as great as it was in 1929! Twenty percent of the the American People (the rich and super rich), control over 80% of the Nation's wealth and YEARLY Income. Breaking down the 20% even further; 19% are rich, and 1% – – super rich – – the so-called, uber' rich. That 1%, receives over 23% of the nation's yearly income. Wanna go a step further? Try this: 1/10 of 1% of the super rich, take in over 11% of our income per year. Staggering to think about, isn't it? Bet'cha didn't know that. Me neither, until recently, and it makes my blood boil!

Our structural economic problems are NOT going to be solved, or even addressed by either of the two mainstream parties. A plague on both their houses! Both Parties are too deeply entrenched with special interests representing Wall Street and Big Business. Have any idea what the Lobbyists knock down collectively a year in salaries: $3.4 Billion, plus bonuses. This does not count the suitcases of money that are carried into the Halls of Congress every year.

Speaking of Wall Street, during at least the past three years, those skunks have stolen $10 Trillion Dollars from the American People by taking huge risks and making just plain, "dumb," decisions. Not to fear! Big Brothers, Bush and Obama rush to the rescue, and bail the bastards out with $800 Billion in TARP Loans that carried little or no interest. Then, without hesitation, they paid out millions in bonuses to their Menions. The CEO that brought Lehmann Brothers down, received a severence package of $500 Million, when he was fired. Can you imagine?! Is this a Great Country, or What? (Wasn't it Lewis with BOA that paid him that amount? Think so.)

Here's another little diddy: In 2008, or 2009, there was a Hedge Fund Manager that made $4 Billion Dollars! while 25 other Menions made at least $1 Billion. Folks, no body EARNS that kind of money!

Meanwhile, we have 15 million people either unemployed or under employed; 40 million people living in poverty and on food stamps; and 50 million people with little or NO health insurance.

Governments at all levels are broke! Entitlement Program Costs are skyrocking, and our streets, roads, and bridges are in disrepair. We are dropping out of the, "space race," and our public eduction system is in shambles. We rank 21st in Math and 25th in Science (or is it vise-versa), among developed countries. Don't get me started on how far we are behind with R & D in a whole host of areas, including alternative energy.

Folks, you keep me informed about good investment opportunities, and I'll do my best to keep you up to date on relevant social, economic, and political issues.

Little Dog in a Big Dog World

[…] Despite Record Gold Prices, Your Holdings May be Worth Less Than You Think […]

From the comments, looks like Keith hit a hot topic. Another article on the best way to invest in gold to minimize tax consequences would be appreciated.

[…] Money Morning Special Report: Despite Record Gold Prices, Your Holdings May be Worth Less Than You Think […]

I am curious about China recently allowing its citizens to hold precious metals. Is this true? Also, what does everyone know about the direction of silver. I am speaking about physically held silver proofs and Silver Eagles etc. Thank you for all the great information that this site has.
Thank you.
Grandma Marilyn