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Thread: Capital gains taxes on PM holdings?

  1. #1
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    Default Capital gains taxes on PM holdings?

    The idea of capital gains taxes is idiotic on its face. Are we legally mandated to pay taxes on the increase in market value of PM holdings? And what about when the markets recede? I bet the losses would not be deductible.

    Anyone?
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  3. #2

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    at the time of sale, yes. Unless you were to have a terrible boating accident, which I hope wouldn't happen....
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  4. #3

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    The thing that's crazy about capital gains taxes on PM's is PM's aren't an investment.

    For example: I exchange $1,000 USD for 1oz of Gold. There's a nice TV I want to buy that is also $1,000 USD. The Govt prints the shit out of USD and it now takes $10,000 USD to get that same 1oz of Gold and it also takes $10,000 to get that nice TV I wanted. Sure, the nominal value based in USD of the gold went up but I didn't gain any purchasing power, I've simply maintained it. The Govt will want to tax (steal) 30% of the $9,000 nominal USD gain. The taxes would be $2,700 USD on that $10,000 gold coin. But now I'm left with only $7,300 USD purchasing power and can no longer afford that $10,000 TV I wanted because the Govt has stolen 30% of my purchasing power. Still better than holding USD, but stolen purchasing power is the key to understand. Hopefully capital gains taxes on PM's get eliminated in the near future.
    Last edited by ctiger2; 11-19-2012 at 01:27 PM.

  5. #4

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    Quote Originally Posted by osan View Post
    The idea of capital gains taxes is idiotic on its face. Are we legally mandated to pay taxes on the increase in market value of PM holdings? And what about when the markets recede? I bet the losses would not be deductible.

    Anyone?
    Changes in market value of PMs are not taxable events until they are realized (you sell the PMs). Yes, you legally have to pay taxes on any capital gains. And for precious metals, they are considered "collectibles" and are taxed at a less favorable rate (maximum of 28% rather than 15%).

    If you are in the 28% or greater FIT bracket, net long-term gains on PMs are taxed at 28%. If you are in lower brackets (10%, 15%, 25%), your gains are taxed at your regular rate.

    Losses (again, when PMs are sold) can be used the same way as investments. You can use them to offset capital gains plus up to $3,000 of other income. Excess losses can be carried forward.
    Last edited by MRoCkEd; 11-19-2012 at 01:53 PM.

  6. #5

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    The IRS considers PMs to be collectables- separate from "investments" like stocks and bonds. Gains are taxed at a higher rate (25% if I remember correctly) than the one for capital gains. However, it is very unlikely (unless you made a large purchase at once) that your metal purchases were reported to the IRS. You will know if they were because you would have been asked to fill out a form with the dealer and sign it. In general, we are talking about purchases of over $10,000. If the sale was not reported, the government will have no idea of any transaction taking place or what amount it was.

    One list of the reporting requirements (where it says "as minted" they are refering to the gold content of the coins):
    http://news.coinupdate.com/irs-and-g...-dealers-0353/
    Here are the only items listed by the IRS in Rev. Proc. 92-103 as requiring submission for Form 1099-B, and the minimum threshold quantities that must be sold in a single or related transactions before the form must be filed:







    Item

    Minimum Fineness

    Minimum Reportable Amount



    Gold Bars

    0.995

    Any size bars totaling 1 kilogram (32.15 troy oz.) or more



    Silver Bars

    0.999

    Any size bars totaling 1,000 troy oz. or more



    Platinum Bars

    0.9995

    Any size bars totaling 25 troy oz. or more



    Palladium Bars

    0.9995

    Any size bars totaling 100 troy oz. or more



    1 oz. Gold Maple Leaf

    as minted

    25 1-oz. coins



    1 oz. Gold Krugerrand

    as minted

    25 1-oz. coins



    1 oz. Gold Mexican Onza

    as minted

    25 1-oz. coins



    US 90% Silver Coins

    as minted

    Any combination of dimes, quarters, or half dollars totaling $1,000 face value or more


    If an item is not on this list, sales of it does not need a Form 1099-B to be filed, no matter how large the quantity!

    There is some ambiguity in the regulations whether the ingots are required to be the actual minimum size required for delivery against a commodity contract or whether a mixture of smaller size ingots that total more than the minimum ounces required for a contract are also sufficient to call for submission of Form 1099-B. ICTA has advocated the conservative position of recommending that coin dealers report any mixture of smaller ingots that, combined, meets or exceeds the minimum contract size.
    Last edited by Zippyjuan; 11-19-2012 at 06:52 PM.
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  7. #6

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    Solution - be steadfast. Do not sell until a new currency is issued. That time is coming.
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