Gold/Silver Tax Swap?

[Cortopassi]

Has anyone done this?

https://asipmdirect.com/turn-a-precious ... -tax-swaps

Seems you can capture your loss on physical gold by selling to a dealer and buying immediately back, minus whatever the commission might be.  There is no wash rule for precious metals.

I need to talk to my local coin shop about this. 

It would seem, for example, if your average buy price is $1500, and you have 10 ounces, you can reap (currently) about $400 capital loss per coin, or $4000 minus any commissions/markups charged by the dealer.

I only see two negatives:

From the site:

1) You physically have to ship your bullion coins and bars, your Perth Mint Certificates or your numismatic coins to us, and we have to physically ship them back to you. This is an IRS requirement. If it wasn’t a requirement, I think you can easily see where there might otherwise be some abuses…where people would try to capture paper losses without actually selling or repurchasing anything.

2) This operation would effectively make any physical holdings you have "visible"

[mathjak107]

you will likely find the spreads they buy and sell at and a  trading or commission fee  if any would make that a losing deal .  you would have to do that locally for one thing since shipping and insurance  would only eat up costs more .

locally what you get is very different then spot .

i took a beating decades ago when i bought my silver bars from republic bank and then wanted to sell them .

commissions can run 2-3% plus a bid/ask spread plus shipping and insurance .

you have to be careful with supposed tax harvesting . more often then not it takes your cost basis in an asset class and merely reduces it  making the tax bite just that more hurtful down the road .

selling eventually or re balancing at a time things may be up and doing well may have worse consequences with the lower cost basis .

tax harvest planning is far more then just selling something at a  loss  and rebuying something else or even the same  investment .


good look at this by michael kitces  who generally is my go to guy for research 

as michel stated :

" Tax loss harvesting is a popular tax planning strategy, especially as the end of the year approaches and investors consider their potential capital gains exposure. Yet for many investors, the benefit of tax loss harvesting is overestimated, as harvesting a loss generates current tax savings, but also reduces the cost basis of the investment, triggering a potential gain in the future that may offset most or all of the loss harvesting benefit!


https://www.kitces.com/blog/evaluating- ... arvesting/

[Cortopassi]

Thanks, MJ

[Libertarian666]

I did something like this quite a few years ago at a local coin dealer who charged a flat fee, about $50 IIRC, which came out to less than 1%. No other spreads or commissions.

[Cortopassi]

Hell, I have enough capital loss rollovers to last the rest of my life at the rate I'm going anyway...

[mathjak107]

to bad you can't sell them .


wait i have an idea . how about a business that buys un-used weight watcher points . you then sell them to people going on a cruise    ha ha ha    kind of a rogue weight watcher group

[sophie]

I did this with physical gold.  You need to calculate whether the tax benefits outweigh the costs of shipping & bid-ask spread, but it's quite straightforward to do. 

In my case it was absolutely worth it - for a visit to the post office, a phone call, and a few hundred dollars in costs, I netted myself a few grand (almost 10x the costs) in deductions.  Not bad in terms of dollars/hr spent!

[Cortopassi]

Thanks, Sophie.  My only concern is with the shipping aspect.  I am going to see if I can somehow do that but not do it, and work something with my LCS.  I have a hard time thinking about putting x number of coins in the mail!

[sophie]

You send it registered mail.

[MachineGhost]

You send it registered mail.

With insurance!