Gyroscopic Investing

A few months ago BearBones pointed out that the IRS has ruled Form 8938 and FBAR reporting is NOT required for gold directly owned and deposited in a safe deposit box overseas.  Judging by the total lack of responses in that thread to BearBones clarification, it appears this landmark IRS ruling  was missed by most everyone on this forum. 

http://gyroscopicinvesting.com/forum/in ... pic=281.15

I’ve been looking into obtaining a safe deposit box in some Canadian bank.  Question:  what’s the best way to get your gold into your deposit box in Canada?  There are 4 possibilities as I see it:

1. Simply transport the coins you already own across the border yourself.  I “think”? it’s OK to do this if you declare what you’re transporting.  Of course the idea of transporting valuables that far is rather scary. 
2. Hire ViaMat to transport your coins for you.  I think this would cost quite a bit but would be safer. 
3. Buy the coins in Canada from a Canadian dealer.  However, I don’t know how practical this is since you can only take $10K cash with you and any bank account you set up there with over $10K in your account triggers  Form 8938 and FBAR reporting.
4. Some US gold dealers (Goldmart for one) state they ship to Canada.  Why can’t you just order from one of these dealers and have them ship it to your hotel or Bed and Breakfast in Canada then store the coins  in your safe deposit box?  During, say, a 2 week vacation in Canada, I’d think you could get a few shipments sent to you. 

I've been weighing the pros and cons of this for a while.  Thoughts anyone?  Perhaps some Canadians on this forum can chime in. 

Special hat tip to BearBones for pointing the IRS ruling. 

Are you located close to Canada?

There are a number of legal tender Canadian Commemorative gold coins that sell at or near spot.  They typically have denominations of $100, $150, etc. (5x higher than comparable Maple Leafs) and usually contain 1/2 ounce of gold.  Since they are legal tender I would assume that there is nothing to declare if you were carrying a few "hundred", but of course I've been wrong before

We know about it; its just impractical for 99% of us so there's not much point discussing it.

There are complex export and import declarations and forms that have to be filled in and processed, or you risk having your coins confiscated by outgoing or incoming customs.  It doesn't matter what the law is when you get an ignorant, bottom-of-the-barrel government bureaucrat deciding he doesn't like you or is having a bad day.

Stick with ViaMat or Brinks.

MachineGhost wrote:It doesn't matter what the law is when you get an ignorant, bottom-of-the-barrel government bureaucrat...

You have the gift of redundancy

I really have no major concerns about transporting gold < 10K across the border. Have been from US to Canada hundreds of times and have never been searched. Easy to conceal. And even more important, not illegal.
Just don't take pepper spray or mace. These seem to be top items questioned about at the border (don't ask me why).

BearBones wrote:Just don't take pepper spray or mace. These seem to be top items questioned about at the border (don't ask me why).

A few years ago I was entering Canada from Michigan driving a pick-up with Texas license plates.  I was asked in at least 10 different ways if I was carrying any firearms.  I don't know if it was the pick-up, the Texas plates, or my guilty countenance.  Probably the Texas plates.

WildAboutHarry wrote:

BearBones wrote:Just don't take pepper spray or mace. These seem to be top items questioned about at the border (don't ask me why).

A few years ago I was entering Canada from Michigan driving a pick-up with Texas license plates.  I was asked in at least 10 different ways if I was carrying any firearms.  I don't know if it was the pick-up, the Texas plates, or my guilty countenance.  Probably the Texas plates.

That would be sort of the Canadian equivalent of a U.S. customs agent asking a Canadian entering the U.S. if he was carrying any hockey sticks or k.d. lang CDs.

WildAboutHarry wrote: A few years ago I was entering Canada from Michigan driving a pick-up with Texas license plates.  I was asked in at least 10 different ways if I was carrying any firearms.  I don't know if it was the pick-up, the Texas plates, or my guilty countenance.  Probably the Texas plates.

Oh yeah, there is a huge problem with Texans smuggling firearms into Canada. 

BearBones wrote:Oh yeah, there is a huge problem with Texans smuggling firearms into Canada.

And Canadians smuggling hockey sticks into Texas

WildAboutHarry wrote:

BearBones wrote:Oh yeah, there is a huge problem with Texans smuggling firearms into Canada.

And Canadians smuggling hockey sticks into Texas

The k.d. lang CDs are actually perceived to be the greater problem, even though I really like k.d. lang myself.

(Edit: Hi SiS  )

I think my biggest concern among all others is what happens when the Canadian bank decides to discontinue servicing you as a US Citizen due to onerous US reporting requirements.

Already it's a challenge to get a Canadian bank to open an account for a US Citizen and in 10 years, new laws to combat terrorism or child molestation or the Loch Ness Monster will add additional reporting requirements. At that point, the Canadian bank may decide not to grandfather you in and cancel your account.

They mail you a letter to your US address giving you 2 weeks to clear out your safe deposit box or the contents will be auctioned. It takes one week for the letter to arrive in the mail. You're forced to take a week off work and fly to Canada to clear out your box. Or you're on vacation and get the letter 2 weeks after the "due date" to clear out your box.

To me that's scarier than the low risk of a Custom's agent at the border searching your vehicle and finding a handful of coins.

TripleB wrote: I think my biggest concern among all others is what happens when the Canadian bank decides to discontinue servicing you as a US Citizen due to onerous US reporting requirements.

I appreciate you "kicking the tires" of this idea, TripleB. Here are my sentiments:
1. I can put together a frightening scenario for most of my assets. That's why I diversify. And, in fact, that's why HB recommended geographic diversification.
2. I get a personal phone call every time one of my GIC's (Canadian CD's) is nearing term, so I tend to trust my Canadian bank more than my US one. I am not too worried about a letter telling me that they are terminating my accounts and clearing out my box on short notice.
3. I trust a bank in a stable foreign neighbor a lot more than most of the other means currently available for geographic diversification. I'd rather be within a day's drive of this asset rather than have to take a bunch of long plane flights to Switzerland or Australia to pick it up (potentially in a SHTF scenario). For me, the latter adds an additional level of risk and inconvenience that does not outweigh the benefit of geographic diversification.
4. In the end, we all must do what we are comfortable with. I like the idea of having gold and cash in Canada.

has anyone actually opened a safe deposit box in canada? can you share your experience?

If you decide to geographically diversify, what country would be safer than Canada?  Maybe Switzerland, but even their banks have started bending over the table for the Federal Government these days.  I think Canada is less likely to screw over U.S. citizens banking in their country than most other nations.  Plus, I'd like to have my SHTF backup finances someplace I can drive to.  If the U.S. government really decides that it doesn't want you to reach Switzerland, I think most of us are sunk.  In contrast, I'd love to see them try and seal the Canadian border.  On second thought, scratch that, it sounds expensive as hell.

Which banks in Canada are recommended for doing this that are willing to open an account for a US Citizen that does not have a Canadian Address or Canadian ID?

TripleB wrote: Which banks in Canada are recommended for doing this that are willing to open an account for a US Citizen that does not have a Canadian Address or Canadian ID?

John T Reed says on his website he has now opened bank accounts in Canada, New Zealand, and Australia.  He also has a whole series of articles on geophaphic diversification.  He doesn't like gold but is puttting some foreign currency in foreign bank safe deposit banks.  If you substitute "gold" in place of "cuurency" his recommendatrions for geographic diversification are spot on in my opinion. 


http://www.johntreed.com/Canadian-bank- ... nt-opening

http://www.johntreed.com/reader-experie ... k-accounts

http://www.johntreed.com/my-Australian- ... ntact.html