pm tax question

[chad]

question. let's say you decide to sell xyz ounces of generic bullion. generic, nothing numismatic. bars + crap rounds. nothing collectible.

do you pay 15% flat capital gains tax based on the appreciation spread, or do you tax the gross amount + pay your tax rate claiming it as income?

i always use my cpa for these types of questions, but he is in california until after xmas. i tried googling, but there's 20,000 opinions and it usually has collectible coins tied in to it.

no, not planning on selling now, just curious...

[osoab]

I thought all bullion was taxed at the "collectables" tax rate. It's either 25% or 35%. It is the same rate if you would sell GLD or SLV.

[Buster]

There are a couple of ways that might work around the collectible tax rate, I think.

1. If buying and selling is a business then you would be taxed as income, which may or may not help but there are legitimate expenses, too.
2. Instead of buying and selling items, start a business, have it buy PMs and then sell the business. After a year, I think the sale of the business (not assets of the business) would be a long term capital gain.

Someone please correct me if I am wrong. :-\

[cthulu]

There are a couple of ways that might work around the collectible tax rate, I think.

1. If buying and selling is a business then you would be taxed as income, which may or may not help but there are legitimate expenses, too.
2. Instead of buying and selling items, start a business, have it buy PMs and then sell the business. After a year, I think the sale of the business (not assets of the business) would be a long term capital gain.

Someone please correct me if I am wrong. :-\


If you don't sell the assets, then where do the assets go? Does the business owner keep it (for free)? How do I subscribe to your newsletter?

[Buster]

There are a couple of ways that might work around the collectible tax rate, I think.

1. If buying and selling is a business then you would be taxed as income, which may or may not help but there are legitimate expenses, too.
2. Instead of buying and selling items, start a business, have it buy PMs and then sell the business. After a year, I think the sale of the business (not assets of the business) would be a long term capital gain.

Someone please correct me if I am wrong. :-\


If you don't sell the assets, then where do the assets go? Does the business owner keep it (for free)? How do I subscribe to your newsletter?


Sorry not too clear on my part. Businesses can be sold in two ways:

1. Stock sale, which in the case of a corporation means you sell all the stock and includes all the assets (PM inventory and everything else owned) and all the liabilities of the entity.
2. Asset sale which means just what it says but does not necessarily include all the assets (and no liabilities). The entity remains in your ownership.

So, when selling all the stock of the business, because you are not taking a gain on "collectibles" but rather on a business entity, you would not have a "collectible gain" but rather a regular long term gain on the company stock if held for at least a year.

But it is just my theory, anyone correct me please?

[Mouse]

Find someone who will buy your "company".

I play a CPA on television. My understanding is the capital gain is taxed at "collectibles" which is I think 28%. Since I only do this for the soap opera, I would venture to say that you should keep track of your buys and sells and use "specific identification" inventory method. That way, since they are "collectibles" and all, you can identify each and every piece, what you bought for and sold for and all of that. That way you could sell your least "collectible" umm...bullion (sarcasm icon somewhere here) and determine your capital gain based on that specific coin's performance. So if you had a bunch of really cool SAE's that you bought for twenty, you would sell them since they are clearly not as cool as the ones that you bought for eight.

So as a collector and all, you would keep your most prized collection, those which you bought at the best price and therefore have the most collector value to you.

Then you voluntarily report the alleged capital gains on your Schedule D.

I am sure there are ways to structure things such as businesses, or to try to do like-kind-exchanges, but that would not make a lot of sense unless you had these things all set up already. If you have a small business you can figure some things out to help make tax effiency but the biggest thing you can do is to voluntarily report all income.

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[/flash]

[cedarchopper]

Start a buy/sell business and the profit off the buy/sell will be your tax liability...not appreciation on the merchandise. Use you imagination to figure out how to acquire the "merchandise" at the price point you are wanting for your business. The "Buy Gold" businesses acquire their merchandise at the price they pay the public, then sell to the refinery, dealer, etc.

The stuff from the "public" comes out of the woodwork...it is not traceable as far as I can tell.

Just rambling...not advice or anything I know about personally.