Gold, Silver and Taxes. What you need to know.
Gold, Silver, and Taxes: What You Need to Know
So you want to invest in gold, but you don’t want the IRS breathing down your neck.
Well, fear not.
Following are the basic laws regarding gold investment and your guidelines for avoiding trouble with Uncle Sam.
Disclaimer: Precious metals tax laws are complex and ever-changing. I encourage you to do your own extended research before proceeding into the world of precious metals investment.
Whether or not you are charged Sales Tax on your purchase of precious metals depends on the state. Some states charge sales tax while others do not, and some states charge sales tax unless the order cost is over a certain amount. For example, California charges sales tax unless the order is over $1,500. Here is a fairly updated list of the states and their precious metals sales tax laws. As far as I know, Texas and Louisiana are the only states to have recently changed their laws. Texas and Louisiana no longer charge sales tax on any purchase of precious metals.
Reporting Purchases to IRS
All purchases with PMIG Of Texas are private and will not be reported to the IRS.
Reporting Sales to IRS
When selling your gold, silver, or platinum bullion, there is a tax form called 1099 that may need to be filled out for the IRS, depending on the types of bullion you’re gaining from. Click here for the list of reportable bullion as well as a list of 1099 exemptions.
Whether or not you will have to pay federal tax on your gains from precious metals will depend on how much you gain. If you sell a coin for more than what you originally paid for it, federal tax will be taken out at a maximum of 28%. For more information on federal taxes in regards to precious metals, click here.
There is nothing special in the process of transferring precious metals to your heirs. Like anything else, precious metals can be left to your loved ones in a trust. In the case of a trust, precious metals are considered part of the estate and will be included for tax purposes. Click here to learn more about estate tax.
If you are the beneficiary receiving the precious metals and decide to sell them later on, you will be taxed according to the types of precious metals and their value upon receiving them. The same rules apply here as in the case of selling previously purchased precious metals.
You can go here for more information on the laws concerning inheritance of precious metals.
Well, I’ve covered the bases on the basic laws of gold, silver, and platinum ownership, but here’s a bonus. Perhaps the kid in you is dreaming of finding buried treasure in your back yard. Let’s just say that happens. Do you owe the IRS? Sorry to rain on your childhood dream parade, but buried treasure is not exempt from taxes. Like the couple who found millions of dollars worth of rare gold coins on their property this year, you would owe a hefty amount to the IRS. Don’t let that stop you from digging, though!