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starwarsgeek171
Penny Hoarding Member
USA
651 Posts |
 Posted - 01/25/2008 : 16:34:09
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I didn't write this, but I loved it, and felt it should be shared. What follows is a valid argument:
Suppose (and this is all supposition) you bought a home for $100,000, and it is now worth $600,000, either in inflated dollars or actual increase in value due to improvements in neighborhood, or physical improvements. Suppose you decided to move, wanted to sell, weren't over 55, and didn't want to pay a 20% capital gains tax. Suppose you found a buyer who was willing to pay you the $600,000 you desired for your home. Suppose he didn't want his property taxes to go up, because he paid so much for the home. Suppose the buyer had $600,000 in cold hard cash, and he wanted to buy your house, didn't want his taxes to go up, and you didn't want to pay taxes on your gain. With me so far? Impossible? Maybe not.
You might go to the buyer, and say something to the effect of, "Look Joe, I'll take an official $100,000 for my house in legal, mint issued coin, with a face value of $100,000. I merely want 100,000 American Silver Eagles, with an official $1 stamped on each one."
Joe might then say, "Those Silver Eagles are worth over $600,000, but are officially $100,000, correct?"
"Yup," might be your answer.
What would be the result of such a sale? I am no lawyer, but it just seems to me, that an American Silver Eagle, with $1 imprimatured on it, or a Gold Eagle with $50 on it, and which are all made by the US mint, must be worth that amount…officially…or am I wrong? If you went to a title company for settlement of a property, and the buyer paid you in Silver or Gold Eagles to the amount of face, how could that be illegal? I mean the US Government made these coins, and stamped on them ONE DOLLAR, FIVE DOLLARS, TEN DOLLARS, and FIFTY DOLLARS, didn't it? Are we to accuse the almighty government of lying? Did they produce coins that do not carry that official value? If they are the imprimatured value, why cannot they be used as such? Well? How can the plain fact of the "value" being stamped onto a coin, not mean just that? If you spend a current "quarter" does it have the purchasing power of a quarter? Yet a pre 1965, 90% silver "quarter" is worth close to a dollar. Could you buy a dollar's worth of stuff for a silver quarter? Why not? When the junk coins first came out, people spent the silver ones as they did the new ones, and Gresham's Law quickly took out the silver ones. They are still "QUARTERS" aren't they, in spite of being worth close to a dollar?
How could any lawyer deny this or argue against it…and win? If what the government puts on coins doesn't mean anything, what does it mean when it says "ONE DOLLAR" on a Silver Eagle? Pristine paper money goes for more than its face value all the time, and we can assume it must "officially" carry the value printed on it…correct?
So how is my supposition wrong?
If you found 100,000 brand new dollar bills that were 60 years old, and had been stashed away by a miser, and were worth $5 each, because of their age and condition, why couldn't you "buy" $500,000 worth of stuff for $100,000 worth of these bills, and declare that you had paid $100,000 for the stuff? Obviously, the buyer and seller had to reach agreement on the transaction, but it would be done with US LEGAL TENDER AT FACE VALUE.
Wouldn't it make a dandy case, if the powers that be, didn't approve? "Hey man, is this a dollar or not? Your guys made it in your mint, and it says right here United States of America, One Dollar. See, there's the eagle with the US shield, and look; on the other side, there's Miss Liberty with the rising sun, and In God We Trust. You trying to tell me this isn't a legal dollar? Well, I am getting 100,000 of these for my property, and this means I am getting $100,000 in legal US coin." How could anyone deny it?
I wish someone would do the above deal with official $50 Gold Eagles, or $1 Silver Eagles, and officially buy something for the imprimatured price. Maybe it has been done a lot of times, and I just have not heard of it.
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Edited by - starwarsgeek171 on 01/25/2008 16:35:08 |
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Robarons
Penny Hoarding Member
USA
522 Posts |
Posted - 01/25/2008 : 18:11:34
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Thats all very true, but it sounds like it could be a 'trade' too. Like lets say there was a VERY RARE $20 green star limited porduction bill/note made in 1920 and it was worth $500,000. You could 'buy' a half million house for $20, but your also 'trading' something worth half million too. So could the gov't tax a trade? Also think of trading a $500,000 painting for a $500,000 house?Could they tax that transaction?
But all that above can be total crap too. Just an opinion. |
Robber Baron= Robarons |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 01/25/2008 : 18:15:44
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| I believe there was a recent court case in which the IRS made the claim that the value of the silver was based on the bullion value and not the face value and LOST. My only concern with that is if the goverment confiscated your 90% or ASEs and they only paid you the face value for it. |
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Think positive. |
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starwarsgeek171
Penny Hoarding Member
USA
651 Posts |
Posted - 01/25/2008 : 18:17:03
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Who's to be the judge of whether it's a trade or a "legitimate" purchase (Supreme Court)?
I think a trade would not be taxable (no money is exchanging hands). El Dee? |
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Robarons
Penny Hoarding Member
USA
522 Posts |
Posted - 01/25/2008 : 19:03:51
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| Well I thought about it and now who gives the value to the stuff? A picture may be worth $500k deemed by the public, but no one may pay that much if it would be bought. Now I may trade a 96' double die silver eagle for a house because I think its worth $500k, but the markets would pay spot because its just 1 ounce of silver. Which value prevails? Its not a good example, but the moral is who makes the values of stuff and what value would the gov't use if it was taxable? |
Robber Baron= Robarons |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 01/25/2008 : 19:41:28
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Best end run around the tax issue on selling the house-
legally declare the sale as $100,000 to the courthouse and say to the courthouse the seller paid cash (give a reciept that you recieved 100K so the buyer has proof of the sale.)
It is now up to t he IRS to prove What Kind of cash went into the deal-
and as per the IRS rules you can deduct up to $250,000 of income from the sale of a house after you live there for 2 years, so selling the house for what you bought it for just ends up as a no profit house in the eyes of the IRS or the tax form.
Suppose you wanted $100,000 in copper pennies?
Besides making the evening news as the nutckae of the state,
you would still end up with your profit with no objection form the fed gub mint.
(Use 20 dollar gold peices? Use Morgan or Peace dollars? They are still legal tender, they never were demonetized.)
It is doable since both parties agreed to a "cash" payment for the house, unless the cash is drug money the government really can't win the case in court.
(There is no taxes due on owning silver coins, only when you sell.) |
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starwarsgeek171
Penny Hoarding Member
USA
651 Posts |
Posted - 01/25/2008 : 20:07:57
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Ardent, you are correct regarding that case. It was a major blow to the government. I read about it while researching the bullion taxation issue (El Dee was right).
pencilvanian, your idea would be a great way to avoid Ardent's comments relating to the possibility of a forced FRN-trade/confiscation. I wanted people to think about how the government really screwed itself on this one (putting small dollar amounts on valuable coins - especially the modern $50 gold pieces). Also, who ultimately assigns value? |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 01/25/2008 : 20:23:07
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Who ultimately assigns value?
The value or dollar denomination of government silver and gold coins is a throwback to when such coins circulated,
this is the reason gold coins are represented by "Officially" Five dollars, "Officially" ten dollars, etc.
The government already had the denominations on the books for gold coins and silver coins, so with congressional approval and a law added to the books to create commemorative or bullion coins, gold and silver coins were created with the formerly used denominations.
The fifty dollar gold coin I think was a special case, since no fifty dollar gold coin was ever minted for circulation, though there were a very few commemorative $50 gold coins minted for the Panama Pacific Exposition 1915.
(Platinum coins from the US Mint needed special congressional approval, even though they are only for bullion buyers, not really for spending.)
The 'value' is merely a floor to the value of the commemorative or bullion coins. the dollar amount assigned to the coins comes from old federal laws still on the books and congressional approval/federal law.
Theoretically, the government could introduce a new five dollar coin or ten dollar coin, etc. for circulation since a federal law is what would be needed to create such coins (congress has the power to regulate money, its value etc. per the constitution.)
The thing is no one in the government ever thought anyone would ever use bullion coins for anything other than as a way of owning silver or gold. a person could use such coins as their face value if they want to, though they, the spender, would be losing money on the deal.
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Edited by - pencilvanian on 01/25/2008 20:28:44 |
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fiatboy
Administrator
912 Posts |
 Posted - 01/25/2008 : 20:58:21
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I find this topic very interesting. What amazes me is that it's even come to this point. Making large purchases with gold and silver used to be the norm, not the exception. Americans of an older generation would think us insane for not using gold and silver. All of these problems, like what is a dollar? is a bullion coin worth face or market? even most tax laws---these were non-issues for a large span of time in U.S. history.
"Oh what a tangled web we weave when first we practice to deceive." |
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NotABigDeal
1000+ Penny Miser Member
USA
3890 Posts |
Posted - 01/25/2008 : 23:25:09
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Funny, I was trying to convince my boss to give me my equivalent pay in $50 Buffaloes every other week....Still get a check....
Deal |
Live free or die.
Plain and simple.
"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your council or your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen."
- Samuel Adams |
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c140cessna
Penny Collector Member
USA
419 Posts |
Posted - 01/25/2008 : 23:54:20
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90% "Junk Silver Coins" are worth about 11.5X Face Value....so, for that $600,000 home, you could accept just $52,000 in dimes/quarters/havles/dollars...
I've also thought about this same transaction many times....it also would work for anything you buy that is subject to taxes....like automobiles/boats/aircraft.....but most states have laws that say "actual purchase price OR FAIR MARKET VALUE". |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 01/26/2008 : 08:39:13
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But what determines a true Fair Market Value?
Hoses are declining in price due to the housing bubble, a house that went for $400,000 may now be bought for $325,000 more or less.
A new car loses much of its Fair Market Value when it is one year old.
There are always loopholes in the law if one looks hard enough. |
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Silver Eagle = $1
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