When a person sells coins to a dealer, does the dealer usually ask for a US residency certification

Longacre

I assume that most coin dealers have a global business (especially with the internet) and have clients from around the world. Also, there are lots of coin collectors in the US who are not considered US residents for US federal income tax purposes. Suppose a person wants to sell coins outright to a particular dealer, and the dealer either knows the seller vaguely or he has never dealt with him before.

Does anyone know if dealers regularly ask the seller for a certification of US residency, in order to prevent 30% US withholding tax from being paid as part of the transaction? If not, are dealers taking an unnecessary risk with "not knowing the other party" because the dealer is ultimately liable (as the withholding agent under the law) if withholding tax should have been paid and it was not as part of the transaction? Do dealers come across this issue often, or do they just assume that every person who sells coins to them is a US resident and they throw caution to the wind regarding the withholding tax risk? [Note that there are special rules for personal property under Sec. 865 which may get you out of this situation, but I am curious what the standard practices of dealers are].

guitarwes

How in the WORLD do you come up with all these questions everybody has to think about and have to read the question over 7 times because by the time we get to the bottom, we have forgot what you're asking???

BUT, you do pose some interesting inquiries. I enjoy them!!!


BTW, My dealer buys whatever walks into the door, the coins look the same whether in the hands of citizens or aliens. How he deals with the tax thing(which is what you're asking) I don't know. WHICH, makes me replying to this thread absolutly useless. but it was fun nonetheless

mrearlygold

fishcooker

Since the IRS doesn't even rat out people's fake charity write-offs, I see no reason for a dealer to fear some kind of oddball reporting requirement.

oreville

I have always wondered if the IRS has ever thought of hiring Longacre to help them with enforcement of the tax laws.

LEAP269

i can live in arizona and have a state issued identification card and not be a us citizen.

ABC123

Why would a coin collector care ?

morgannut2

<< <i>I assume that most coin dealers have a global business (especially with the internet) and have clients from around the world. Also, there are lots of coin collectors in the US who are not considered US residents for US federal income tax purposes. Suppose a person wants to sell coins outright to a particular dealer, and the dealer either knows the seller vaguely or he has never dealt with him before.

Does anyone know if dealers regularly ask the seller for a certification of US residency, in order to prevent 30% US withholding tax from being paid as part of the transaction? If not, are dealers taking an unnecessary risk with "not knowing the other party" because the dealer is ultimately liable (as the withholding agent under the law) if withholding tax should have been paid and it was not as part of the transaction? Do dealers come across this issue often, or do they just assume that every person who sells coins to them is a US resident and they throw caution to the wind regarding the withholding tax risk? [Note that there are special rules for personal property under Sec. 865 which may get you out of this situation, but I am curious what the standard practices of dealers are]. >>

----
----------
----------
I do remember something about Legend not dealing with non-USA buyers---might have just been a joke, or there may be a reason!

Jcarney

<< <i>I assume that most coin dealers have a global business >>



That's quite an assumption!

earlwbollinger

This sounds to me like a rotten way of stiffing a customer out of up to 30% of the sale by ripping them off and using the government as an excuse.

lathmach

I haven't been asked for residency information, but I've had to provide other information so they could send me a 1099. Some here have said this requirement is only for bag quantities of silver.
I don't understand the 30% withholding remark. They don't withhold anything. They send you a 1099 and you file that information on your tax returns.

Ray

topstuf

My information at the shop was:

A 1099 is only required for bullion. Taxes are due on all profits. The responsibility for reporting is the seller's.
The 1099 for bullion is not required for American Eagles in silver or gold. Neither is it required for any bullion coin that was not in existence when the commodity exchange was selling contracts on coins.
Thus, a Krugerrand or a Maple Leaf was a reportable item as was any quantity of silver 90% coin OVER $1,000 face value as that was the amount of the contract that used to be traded.

(the entire thing was put into the law to apply to commodity traders and coin dealers, being foul and heinous creatures, were included as an additional benefit to selecting the profession)

So, American product bullion, Philharmonics, Pandas, Koalas, etc. etc. were not a "reporting" item.

And......to add to the confusion.......neither were quantities of Krugers or Maples under 25 per day.

UNLESS......

The dealer had a "reasonable suspicion" that the trades were made to AVOID the reporting.

Now....isn't that simple?

lathmach

Very useful information, Topstuf.

Ray

sonoranmonsoon

You must do your own taxes.