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Thread: Tax avoidance using exempt (non-reportable) gold/silver coins

  1. #1

    Tax avoidance using exempt (non-reportable) gold/silver coins

    If I understand correctly, bullion invented after the IRS created their "reportable items list" in the 1980s are exempt from income taxes. So certain gold/silver coins such as eagles/buffalos/philharmonics/etc. can be sold for a gain without requiring any capital gains tax, since these bullion were not in existence at the time the list was created. Furthermore, there is no quantity trigger...it is of no relevance whether you sell one coin or ten thousand coins. So theoretically, assuming one lives in a legal tender state like Utah/Wyoming, these are tax-free investments.

    But what if one runs a business that only accepts payment in these exempt coins, instead of federal reserve notes? Let's say I start a car wash that clears a million dollars annually after expenses. If I was paid in dollars, I would owe the IRS a ton of money as usual. But if all my customers paid with exempt coins, would I owe any income tax at all?

    What I'm getting at here is not whether the exempt coins are tax-free investments, but if they are also tax-free when treated as money.

    Another angle I thought of, if they are not completely tax-free, is that they are taxed at face value. So for example, if my business earns 500 one-ounce gold eagles for the year, and assuming the price of gold was static at $1200 all year, then I earned $600k. But the face value of those coins are 50 dollars, so if I was taxed at the face value, my taxable income would only be $25k.

    If any of this is even remotely true, and assuming one's business could survive transacting in gold/silver, then for some people, Utah/Wyoming might be the best tax havens on earth!



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  3. #2
    I predict it would cost you and your car was all your savings/investment/income in court expenses trying to prove your exempt coins were not taxable.

  4. #3
    IIRC, it has been tried. I remember reading about a company that paid their employees in gold and silver Eagles, hoping to reduce their income tax. Big Brother said nay, ye shall pony the entire amount or face the pains of "justice".

    https://www.reviewjournal.com/news/employers-gold-silver-payroll-standard-may-bring-hard-time/
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  5. #4
    Quote Originally Posted by kona View Post
    If any of this is even remotely true
    It isn't. There are no such things as "exempt coins", and gold/silver coins received will be valued at their fair market value, not face value.
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  6. #5
    Quote Originally Posted by kona View Post
    If I understand correctly, bullion invented after the IRS created their "reportable items list" in the 1980s are exempt from income taxes. So certain gold/silver coins such as eagles/buffalos/philharmonics/etc. can be sold for a gain without requiring any capital gains tax, since these bullion were not in existence at the time the list was created. Furthermore, there is no quantity trigger...it is of no relevance whether you sell one coin or ten thousand coins. So theoretically, assuming one lives in a legal tender state like Utah/Wyoming, these are tax-free investments.

    But what if one runs a business that only accepts payment in these exempt coins, instead of federal reserve notes? Let's say I start a car wash that clears a million dollars annually after expenses. If I was paid in dollars, I would owe the IRS a ton of money as usual. But if all my customers paid with exempt coins, would I owe any income tax at all?

    What I'm getting at here is not whether the exempt coins are tax-free investments, but if they are also tax-free when treated as money.

    Another angle I thought of, if they are not completely tax-free, is that they are taxed at face value. So for example, if my business earns 500 one-ounce gold eagles for the year, and assuming the price of gold was static at $1200 all year, then I earned $600k. But the face value of those coins are 50 dollars, so if I was taxed at the face value, my taxable income would only be $25k.

    If any of this is even remotely true, and assuming one's business could survive transacting in gold/silver, then for some people, Utah/Wyoming might be the best tax havens on earth!
    Unless you are accepting the coins as face value, the IRS is counting them as a collectible (not capital gains which can be lower) which is taxed at 28%. But the question actually is were your gold coin purchases reported to the IRS and subject to such taxes (unless you are going to voluntarily report them)? Only sales over $10,000 are reported.

    States may also tax them- some like the mentioned Utah and Wyoming do not have sales taxes on metals purchases.
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  7. #6
    To clarify:

    Gold purchases via cc/wire/Bitcoin of any amount will not produce a form 8300 by a dealer, i.e. they will not report it since there is already a record from your bank/cc.

    In terms of selling, the coins I mentioned will NOT generate a 1099-B. Brokers do not report them because the government never instructed them to. So in reality, they ARE exempt from reporting. That doesn't mean they aren't taxable, it just shifts the burden of reporting to the taxpayer.

  8. #7
    Quote Originally Posted by kona View Post
    To clarify:

    Gold purchases via cc/wire/Bitcoin of any amount will not produce a form 8300 by a dealer, i.e. they will not report it since there is already a record from your bank/cc.

    In terms of selling, the coins I mentioned will NOT generate a 1099-B. Brokers do not report them because the government never instructed them to. So in reality, they ARE exempt from reporting. That doesn't mean they aren't taxable, it just shifts the burden of reporting to the taxpayer.

    do a search here: https://www.goldismoney2.com

    good information to avoid tax on bullion.
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  9. #8
    Quote Originally Posted by kona View Post
    If I understand correctly, bullion invented after the IRS created their "reportable items list" in the 1980s are exempt from income taxes. So certain gold/silver coins such as eagles/buffalos/philharmonics/etc. can be sold for a gain without requiring any capital gains tax, since these bullion were not in existence at the time the list was created. Furthermore, there is no quantity trigger...it is of no relevance whether you sell one coin or ten thousand coins. So theoretically, assuming one lives in a legal tender state like Utah/Wyoming, these are tax-free investments.

    But what if one runs a business that only accepts payment in these exempt coins, instead of federal reserve notes? Let's say I start a car wash that clears a million dollars annually after expenses. If I was paid in dollars, I would owe the IRS a ton of money as usual. But if all my customers paid with exempt coins, would I owe any income tax at all?

    What I'm getting at here is not whether the exempt coins are tax-free investments, but if they are also tax-free when treated as money.

    Another angle I thought of, if they are not completely tax-free, is that they are taxed at face value. So for example, if my business earns 500 one-ounce gold eagles for the year, and assuming the price of gold was static at $1200 all year, then I earned $600k. But the face value of those coins are 50 dollars, so if I was taxed at the face value, my taxable income would only be $25k.

    If any of this is even remotely true, and assuming one's business could survive transacting in gold/silver, then for some people, Utah/Wyoming might be the best tax havens on earth!
    bullion is bullion
    coins are coins.

    coins have a face amount.



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  11. #9
    There is no sales tax on coins or bullion here . I also accept them for payment for things I sell .
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