Taxes on selling gold & silver

[Wonk]

Interesting article on taxes and common misconceptions:

http://www.caseyresearch.com/editorial/ ... 178ED0610A

I noticed something:

"Gold jewelry sales are not reportable. This makes the Heirloom Collection an attractive consideration and an excellent diversification maneuver (for both financial and romantic reasons!)"

I wonder how many cunning gold investors will resort to melting their kruggerands and fabricating hundreds of gold rings in order to sidestep the 28% tax?

[Jan Van]

So how does that work really? Say I buy a couple of Krugerrands at BullionDirect. Next year I sell them at BullionDirect or Apmex or my local coin shop. How does the tax reporting work? Anybody???

And what about an Everbank Metals Select Gold Account? Looks like the unallocated account option doesn't charge a storage fee. Would that make it more interesting?

[tcat]

I too am wondering about the unallocated gold account at Everbank.  They hold the gold instead of sending it to you.  When you sell this, it is 28% tax, correct?  I am guessing that Everbank would be a risker move than an ETF because that is just one bank we'd be depending on.

[foglifter]

Interesting article on taxes and common misconceptions:

http://www.caseyresearch.com/editorial/ ... 178ED0610A

I noticed something:

"Gold jewelry sales are not reportable. This makes the Heirloom Collection an attractive consideration and an excellent diversification maneuver (for both financial and romantic reasons!)"

I wonder how many cunning gold investors will resort to melting their kruggerands and fabricating hundreds of gold rings in order to sidestep the 28% tax?

I've been looking through the old posts and got puzzled by the Heirloom Collection. So I checked the website and here's what I saw:



Looks like people have been melting their gold into jewelry like crazy. 

[MediumTex]

I doubt if the IRS would say that the gain on the sale of gold escaped taxation because it had been heated and cast in a different form.

Just because a sale is not reportable does not mean that gains on that sale are not taxable.

There are certainly plenty of opportunities to play fast and loose with taxes when it comes to gold bullion, but that doesn't mean it's a good idea.

[Greg]

I doubt if the IRS would say that the gain on the sale of gold escaped taxation because it had been heated and cast in a different form.

Just because a sale is not reportable does not mean that gains on that sale are not taxable.

There are certainly plenty of opportunities to play fast and loose with taxes when it comes to gold bullion, but that doesn't mean it's a good idea.

I was going to write something regarding this but you beat me to it MediumTex. I would think one form or another wouldn't be able to get around the legal issues.

However, I believe I wrote in a previous post that if the dealer you sell it to doesn't report it, it is up to the individual to report to the IRS what their cost basis was. This would then be a very fuzzy area because you are asking people to pay taxes on something that the IRS might not know they are supposed to be getting income from.

I live near a Cash 4 Gold place and I see people going in there a lot trying to sell their gold jewelry, etc. They might get a few hundred dollars from that transaction and that gold could have been years or even decades old. My guess is they have no idea you're even supposed to pay tax on the gold, let alone actually doing it. Render unto Caesar I suppose?