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n/a
deleted
18 Posts |
 Posted - 10/08/2009 : 13:32:36
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Suppose you want to trade in your silver bullion or 90% silver coins for FRNs because by some freak chance silver shot up to $500/oz. Being a smart person you managed to save up 1,000 oz. of silver--needless to say that's a hell of a lot of money. Would one have to claim on their income tax the profits gained from the sale of those PMs/90%?
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Lack of planning on your part does not constitute an emergency on my part. |
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digitalfour
Penny Sorter Member
74 Posts |
Posted - 10/08/2009 : 13:36:44
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| I think you have to pay a capital gains tax. |
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barrytrot
Administrator
USA
721 Posts |
Posted - 10/08/2009 : 13:44:19
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Yes, digitalfour is correct.
Here is how it works:
(Sale Price) - ((Cost of aquisition (cost basis)) = Your net capital gain
You can either do that on a piece by piece basis. I.e. I paid $7 for this ounce, $8 for this one.
Or you can do cumulative values. I.e. my total cost of aquition is $10,000. |
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2old
Penny Pincher Member
188 Posts |
Posted - 10/08/2009 : 13:51:47
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| You may want to check into IRS 1031 exchange rules. You are allowed to exchange for "like kind", on some situations. Meaning 1/2 million gain. Those who sell electronic scrap and take silver or gold pellets back rather than dollars, may trade those pellets for bullion as a like kind exchange and pay no taxes until they take dollars or realize the gain. This can also be applied to real estate and cattle for example. If you take the money, you pay the tax. If you do a like kind exchange, you may defer it. Get good advice on these situations and even double check with the local IRS office before filing a 1031 exchange to make sure it is properly documented. I am, guessing that by FRN's you mean Federal Reserve Notes/USD. This is may not be an answer to your question, but an alternative. Those selling large amounts of copper may want to look into this. |
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oober
1000+ Penny Miser Member
USA
1304 Posts |
Posted - 10/08/2009 : 13:59:30
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| Doesnt there have to be a record of a sale 1st? No record, no tax. :0 |
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Country
1000+ Penny Miser Member
USA
3121 Posts |
Posted - 10/08/2009 : 14:06:44
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quote:
Originally posted by digitalfour
I think you have to pay a capital gains tax.
28% tax federal, with no distinction between short-term and long-term. |
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The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life.
– Theodore Roosevelt
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n/a
deleted
18 Posts |
Posted - 10/08/2009 : 14:19:36
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Thanks for the info, all. I was throwing around the idea that I would pay off my mortgage early if I ever bought enough PMs. Looks like I'll have to factor in my mortgage PLUS taxes.  |
Lack of planning on your part does not constitute an emergency on my part. |
Edited by - n/a on 10/08/2009 14:20:01 |
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Nickelless
Administrator
USA
5580 Posts |
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dakota1955
1000+ Penny Miser Member
2212 Posts |
Posted - 10/08/2009 : 15:30:18
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| All that kind of stuff made just end up on a black market. Cash only. |
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barrytrot
Administrator
USA
721 Posts |
Posted - 10/08/2009 : 16:14:22
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quote:
Originally posted by Nickelless
quote:
Originally posted by oober
Doesnt there have to be a record of a sale 1st? No record, no tax. :0
What about silver we find in boxes from the bank? I don't see how the feds could prove sale price.
No record = You had better create one or the 1st sale = ZERO BASIS, i.e. 100% of your sale is profit!
Silver from bank = Face value basis.
The burden of proof is NOT on the feds. It is on YOU! So if you don't have proof of a cost basis you need to make a reasonable case for one. |
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n/a
deleted
478 Posts |
Posted - 10/08/2009 : 16:18:18
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quote:
Originally posted by Country
quote:
Originally posted by digitalfour
I think you have to pay a capital gains tax.
28% tax federal, with no distinction between short-term and long-term.
Correct. 28%. |
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n/a
deleted
478 Posts |
Posted - 10/08/2009 : 16:22:31
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quote:
Originally posted by barrytrot
quote:
Originally posted by Nickelless
quote:
Originally posted by oober
Doesnt there have to be a record of a sale 1st? No record, no tax. :0
What about silver we find in boxes from the bank? I don't see how the feds could prove sale price.
The burden of proof is NOT on the feds. It is on YOU! So if you don't have proof of a cost basis you need to make a reasonable case for one.
Correct. The IRS says you owe them taxes on the sale. It's up to YOU to PROVE how much you paid for the item. If you can't, they take it all. |
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barrytrot
Administrator
USA
721 Posts |
Posted - 10/08/2009 : 16:47:14
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As a funny side note: One year I did a lot of stock sales and didn't file my taxes on time so the government sent me a bill for $685,300! The reason is that when you sell stock the government gets a notice of the SALE PRICE. Unless you supply the basis they think it is ZERO!
I quickly filed and owed something like $15,000.
So if you plan to make money on PM's of any substantial amount make sure to have some reasonable way to prove your basis points! |
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Tax on Bullion and or 90% Silver
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