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 Replies: 15 / Views: 1,667 |
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Pillar of the Community
United States
3789 Posts |
have a random thought here on recent price action in PMs despite all this QE...
Markets are much to huge to really pin point why a certain asset class is moving in one direction, whether it be higher or lower. Many times, the reason is only revealed or known AFTER the majority of the move has started..
so, why all the gold and silver selling? There's lots of reasons ima sure and I dont really waste time in pondering the whys or hows. At the end of the day I dont care really, I just trade these.. but one thing that I think is..
I just wonder if theres been a tussle behind the scenes as to how taxes will impact PMs. I know its been discussed and pushed to drop the tax rate on collectibles impacting gold and silver to a lower rate rather than the current tax. Also, last year or should I say this year, purchases I believe if memory serves me right, of over 600 in PMs are to be reported to the IRS (correct me if ima wrong, memory is a bit foggy as I type this)
Anyways, that was just a random thought I was musing on the price action of metals.
Also, many members of congress have large holdings in mining companies.. or they did at certain time.
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Bedrock of the Community
13014 Posts |
Thats actually a pretty interesting angle to look at it. It is entirely possible that people are selling to get liquid and avoid the higher tax rates with the fiscal cliff looming. Very possible thats driving some of the drop.
The taxes on them really are weird especially the state ones, I think in texas anything under a grand or 10 grand is taxed but over isn't and some states are the opposite
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Pillar of the Community
 United States
3789 Posts |
Yes that was one thought I had, that there's still a lot of uncertainty with taxes now and going forward. I know its been attempted several times to reduce the rate.
As it is, if you own say GLD or SLV the metal ETFs you are taxed at the full rate as they fall under the same definition of the IRS rules regarding collectibles which is applied towards coins.
On a side note, if youo were to purchase some ETNs instead of ETFs, you would then qualify for a lower and different tax rate as these are tied to futures and derivatives which are taxed completely different.
So... going forward we have some clues, in the form of reactions to look at-
1- PMs reaction to Fed meetings
2- reaction to tax related issues
Again, I really have no clue as to the real reason, nor do I care to dwell, most important to me is the price action which has been not pretty if you are wanting higher prices. In fact I rather think the metals continue to consolidate with the edge going to lower prices at this moment.
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Pillar of the Community
United States
919 Posts |
For many people there are no tax implications in PM's. They buy from shows and LCS's with cash. They sell to LCS for cash. Those that do a large amount of buying and selling on ebay are probably tracked (if not now very soon). Amazon has agreed to start collecting sales tax. I would bet we might see a push to do the same with ebay and other online sites. I know some will say no way, but changes are coming. States loose a lot of tax revenue to side deals. By law they are to be reported but few do. This would be big news to all LCS's. |
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Pillar of the Community
United States
3789 Posts |
I disagree with your first line.
MANY people that own PMs, have tax implications. You arent aware that many swiss vaults cant even store gold anymore. Perhaps you werent aware that Home Depot has boosted in the past years their inventory of safes (havent you noticed the end caps). this sort of trend start about 2-3 years ago. I remember JP Morgan was starting to shop around for secure warehouses to build more sites for vaults to lease out to individuals and their precious metals.
The market is much larger than you are aware at the high net worth level in regards to PMs. I am not referring to local coin shops and buyers of a handle of coins at a time.
I am talking in regards to high net worth and individuals who have purchased 6 and 7 figures of PMs in the form of coins and bars. 99% of these folks are NOT buying from a local coin shop.
Again I am not talking about revenue in the form of "sales Tax" I am talking about taxes in the form of capital gains, two completely diffrent taxes.
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Pillar of the Community
United States
919 Posts |
It is fine to disagree but making assumptions about what I know and don't know is off base. You know nothing about me or my experience with PM's.
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Pillar of the Community
United States
3789 Posts |
you shouldn't take what I said as personal. Its more of "matter of fact" manner.
It is of no concern to me to be right or wrong nor what others think, or know. Ima just spitting out these thoughts. My opinion only and not set in stone nor gospel.
Again these are random musings and thoughts. Ima sorry if you took it as a direct comment to put you down.
I am solely talking from what I Am seeing, hearing, reading and thinking about on the side.
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Pillar of the Community
United States
648 Posts |
Yup7676 - when you start using the words "You" & "You" - it comes off as personal...
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Pillar of the Community
United States
3789 Posts |
Ok, well take the "you" out and replace with "one".
I already said sorry, I wouldnt take it personal if someone said you to me, but thats just me.
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Pillar of the Community
United States
830 Posts |
I think there is a lot of tax gain selling this month in anything that has had lots of gains in the last few years to avoid the higher tax rates next year or longer term.
I might consider it if my paper PM holdings were not in my Roth IRA (tax exempt).
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Pillar of the Community
United States
4008 Posts |
Quote:
The taxes on them really are weird especially the state ones, I think in texas anything under a grand or 10 grand is taxed but over isn't and some states are the opposite Yeah, BB, state taxes are all over the place as far as PMs are concerned. WA state, for example, has a state sales tax but does not collect tax on the buying / selling of gold and silver... coins for sure but maybe bullion too. We also do not collect sales taxes on the sales of gun safes, probably in an effort to promote safe gun storage and reduced accidents with kids and fewer grab and run type thefts. Funny thing is, a "gun" safe is pretty much like any other safe if it is of decent quality and not a "gun cabinet". Only big difference seems to be in how the shelves are configured. If a safe buyer does not like how it comes, it is easy to install some solid 1/2" plywood shelves as opposed to the cut-out shelves for rifle and shotgun barrels. I did that and even covered the shelves with some scrap black cloth that we had laying around. It looks pretty good and works very well. |
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Pillar of the Community
Canada
3692 Posts |
November: Presidential election -> promises of "everything is fine don't worry about it" blah blah schpiel
December: People selling assets for Xmas money.
January: People want to save and/or pay off debts as part of their New Year's resolution.
February: People wake up.
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Valued Member
United States
386 Posts |
A good point is brought up about internet sales. The tax dept. here has been known to threaten companies into compliance if they deliver product in the state. I remember one instance where it seized a truckload of furniture in an effort to get the company into compliance, compliance meaning getting the company to collect sales tax from in-state consumers and also to turn over its list of those buyers who hadn't paid sales tax. Luckily, precious metals are not taxed here, as far as I know. It feels good not to shell out the extra $ and not to have big brother looking over "your" shoulder.
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Valued Member
Australia
216 Posts |
Ok, I'm an Aussie, so I don't know US tax law but are we talking a capitol gains type tax. It that is the case then yeah I could see that being a factor in selling now. If it was counted as income though, I don't know how that would work. I mean how would the liability be calculated? Off topic for Ed_B Quote:
Funny thing is, a "gun" safe is pretty much like any other safe if it is of decent quality and not a "gun cabinet". Only big difference seems to be in how the shelves are configured. Here in Oz "gun safes" are a lot better than the average safe. Better material grade/thickness and better locks. Only maybe 20-25% more expensive though. |
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Bedrock of the Community
13014 Posts |
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If it was counted as income though, I don't know how that would work. I mean how would the liability be calculated? Not sure which one it would fall under, my guess would be the paper ones would be cap gains and physical would just be treated like other sales money. At the moment all of the income brackets that would allow for extra money for things like PMs look like theyll be getting some increase so not sure it matters if thats why someone was selling. Quote:
Yeah, BB, state taxes are all over the place as far as PMs are concerned. WA state, for example, has a state sales tax but does not collect tax on the buying / selling of gold and silver... coins for sure but maybe bullion too.
We also do not collect sales taxes on the sales of gun safes, probably in an effort to promote safe gun storage and reduced accidents with kids and fewer grab and run type thefts. Funny thing is, a "gun" safe is pretty much like any other safe if it is of decent quality and not a "gun cabinet". Only big difference seems to be in how the shelves are configured. If a safe buyer does not like how it comes, it is easy to install some solid 1/2" plywood shelves as opposed to the cut-out shelves for rifle and shotgun barrels. I did that and even covered the shelves with some scrap black cloth that we had laying around. It looks pretty good and works very well. Im not sure what it is in VA I should probably look into it more lol. Thats a nice little gun safe promotion you guys have though. There are some really nice gun safes and I certainly would just buy one regardless of use if I had the option between a tax free safe or a "normal" safe. |
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Pillar of the Community
United States
4008 Posts |
Quote:
Here in Oz "gun safes" are a lot better than the average safe. Better material grade/thickness and better locks. Only maybe 20-25% more expensive though. Could be. Most of the time in the US, a safe is a safe. Only real difference seems to be in marketing. Business safes tend to be more like cubes while gun safes tend to be taller and more narrow. Construction materials look similar. Can't say about the locks, though. |
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Replies: 15 / Views: 1,667 |
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Posted 12/31/2012 10:50 am
