Tax Implications
JapanJohn
Posts: 2,030 ✭
I'm 43 and have to work at least 13 more years to get my retirement. (US Civil Service).
What if I bought high dollar coins now say $75K to 100K and sold in 13 years.
What are the tax implications at sale time of this and lets just assume they are pre 1933 gold, probably $20 Saint Gaudens.
John
What if I bought high dollar coins now say $75K to 100K and sold in 13 years.
What are the tax implications at sale time of this and lets just assume they are pre 1933 gold, probably $20 Saint Gaudens.
John
0
Comments
Russ, NCNE
Elaborate.
John
Never view my other linked pages. They aren't coin related.
It would be treated as a long term capital asset for loss or gain purposes. Currently, gains in collectibles are taxed at a significantly higher rate than gains in stock and such like.
If the grades on these Saints are high enough you won't have to worry so much about the fluctuations in the spot value. Talk to saintguru about how high you need to go in order to have a "real coin" instead of a bullion piece.
That's what I'm talking about, higher grade coins, or heck even just a couple. If I dropped 20K or 30K per coin and sold in 13 years as a collectible I'm thinking that I could turn more than a "common investment" and if something drastic happened in say 5 years like a massive spike, well, I'll dump them then.
John
Never view my other linked pages. They aren't coin related.
<< <i>Russ is expecting the price of gold to be lower in 13 years than it is now. >>
I'm expecting the entire coin market to be lower. In fact, you can pretty much guarantee that it will be since that's around the time I'll be looking at retirement and selling mine.
Russ, NCNE
<< <i>Construct,
That's what I'm talking about, higher grade coins, or heck even just a couple. If I dropped 20K or 30K per coin and sold in 13 years as a collectible I'm thinking that I could turn more than a "common investment" and if something drastic happened in say 5 years like a massive spike, well, I'll dump them then.
John >>
Right now, long term capital gains on stocks are taxed at 15%. Long term capital gains on collectibles are taxed at 28%. I don't know how much longer the tax rate on stocks will stay that low. Hope that helps you with your decision.
I know you have to claim on a 1099 when you sell, but isn't that only over 25 oz's.
Couldn't I buy and sell non reportable, legally?
John
Never view my other linked pages. They aren't coin related.
You are confusing broker/buyer non-reportable paperwork requirements (meaning 1099-B forms) with your duty to report all sales of coins as a capital asset.
Example: If you retired and your AGI was $30,000 and you failed to report $30,000 in sales of coins with a net gain of $15,000 would be sufficient for the IRS to think about bringing you up on criminal charges of tax evasion.
<< <i>Right now, long term capital gains on stocks are taxed at 15%. Long term capital gains on collectibles are taxed at 28%. I don't know how much longer the tax rate on stocks will stay that low. Hope that helps you with your decision.
Are you sure about that? My accountant told me the percentage is based on your tax bracket during the year you sell a coin or coins (10%, 15% or whatever of the profit)
If they are passed on through inheritance, they receive a "stepped-up" basis which reduces the taxable gain for the heirs when they eventually sell.
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
What if your state has no tax on coins does that affect anything?
By keeping your coin collecting as a hobby, you'll sleep a lot better at night.
That refers to sales tax, not income tax.
I agree stick to a CD.....
<< <i>My understanding is that short-term gains on collectibles get taxed at your regular tax rate for that year. Long-term gains are taxed at 15% IF you are in the 15% tax bracket; if not, they are taxed at 28%. >>
Not for collectibles. For long term capital gains they are taxable at 28% no matter what your bracket is.
<< <i>
<< <i>My understanding is that short-term gains on collectibles get taxed at your regular tax rate for that year. Long-term gains are taxed at 15% IF you are in the 15% tax bracket; if not, they are taxed at 28%. >>
Not for collectibles. For long term capital gains they are taxable at 28% no matter what your bracket is. >>
But these are not collectibles, they are investments in metals which are similar to stocks.
<< <i>
<< <i>
<< <i>My understanding is that short-term gains on collectibles get taxed at your regular tax rate for that year. Long-term gains are taxed at 15% IF you are in the 15% tax bracket; if not, they are taxed at 28%. >>
Not for collectibles. For long term capital gains they are taxable at 28% no matter what your bracket is. >>
But these are not collectibles, they are investments in metals which are similar to stocks.
Tell that to the Tax Court!!!
you said
Here's a novel idea.....why not buy a cd that pays 5% and collect $141,423.69 at the end of those 13 yrs.?
do you know how much tax will be paid on this cd over the 13 years? do you know how much the lost opportunity cost is on this tax?
do you know how much inflation would devalue the $141,424 over 13 years?
consider this: all the gain in the cd is taxable so the net return is more like 3.5%. if inflation averages 4%,(in real life my personal inflation rate is much higher then 4%), then one is losing money every year your strategy is employed. does that sound like a winning idea? how many of these do you want to own?
respectfully submitted,
leap269
In any case I don't like betting on the strength of the US dollar over the next 10 years. Now a 5% CD in other currencies is a diff story.
I like a gold "CD" as well...at least for the next 5-7 years.
roadrunner