Paying Taxes On Precious Metals

I am not familiar with precious metals taxes, I honestly didn't know such a thing existed, but It would seem strange to me if you sell your assets with no capital gains then how would the government be able to tax it? How would they be able to prove it with cash transactions? If you buy $1000 worth of gold in May and sell it for $1000 in August then you have no profit or income to tax. Does this mean when I sell my old car for $1000 or my stereo system for $600 that I should pay taxes on that money? To me it doesn't make sense because it's not profiting me, I'm not a private business with retail values and overhead, I just exchanged some personal assets for their cash value.

Again I could have that all wrong but just doesn't make sense to me.

A reputable dealer, basically any seller with a sales tax license, is going to keep close accounts on everything they buy and sell as that determines their gross profit. All of the expenses are then deducted from that gross profit to give a net profit, which is the amount that determines their tax liability.

Those same reputable dealers will issue an invoice on any sale. Even if you don't get the invoice, one is produced.

You, as a collector, are in a similar situation, although your net gain is the determining factor for tax liability. All costs of purchase including transportation to and from shows, eating while attending a show, the hotel expenses if they exist, the cost of postage you pay to receive items, or the safety deposit box you pay for are all considered to be part of your expenses in obtaining your collection.

If you sell your collection (or pieces of it) having all of that information will help determine the net gain.

I keep all of my invoices for all purchases and expenses in a 3-ring binder in chronological order. My inventory number for each item in my collection begins with the date (military) such that today, for example, would be 150820.

That inventory number is also written or a tab and is attached to the actual item. I can locate the purchase price (and any expenses in purchasing the item) within a single minute.

In the event you do not intend to sell any of your collection then I very strongly recommend that you advise your executor of the exact nature of your collection and how to read your inventory.

Without doing so, your heirs stand the chance of losing significantly either because they sell too low, or don't know how to determine prices paid and expenses incurred in creating the collection. If you don't keep such a listing and advice your executor on those details, I can assure you that even if the executor is familiar with coins, they will probably throw in the towel on trying to work the numbers.

I've been executor for a number of estates and there is NOTHING that is more time consuming with more government requirements than getting an estate settled. Don't do that to someone.

If you are just trying to scam the government, then I hope you get nailed.

HERE is JM Bullion's very informative infographic about PM's and the IRS.

Here's a link to info on every states tax sales tax laws on coins & bullion

http://thecoinologist.com/sales-tax...e-breakdown/

Since we've devolved into politics:

If you voted then the folks who made the tax laws are the ones you voted for.

If you haven't voted then you have nothing to complain about.

If you intend to vote there is hope.

Now you went and said the "T" word.

I vote, my guys just never win!

moxking


All those records mean nothing when somebody dies. The heirs basis steps up or down to fair market value.
https://en.wikipedia.org/wiki/Stepped-up_basis
This is why if you have capitol losses, you better use them before you die.

Buffalow


You're correct that a heirs basis steps up to current market value, but I don't see any reason that purchase/sale records are even relevant at that point. If the estate is large enough that estate taxes are owed, the executor should use the grey sheet bid prices to determine value. On the other hand, if the estate is small enough that taxes are now owed, then a retail price guide like the Red Book should be used because it gives the coins a higher basis for their new owner. The higher the basis, the less taxes will have to be paid in the future (or the bigger the loss).