Options
I just had a disturbing thought.
jmski52
Posts: 22,380 ✭✭✭✭✭
So, we get to the point where gold is rallying strongly every day, which means that the dollar is crashing every day.
At what point do you sell your gold, pay the taxes and take that profit?
Here's the problem. You sell half of your gold at, say $1,600 for a heckuva profit. While you are deciding what to do with the money, the price of gold continues on to $2,000.
You think, "Holy Moly, maybe I shouldn't have sold, but you remember that you just made a pile of cash, so it's not too bad.
Then gold goes to $2,400. Now, that cash is worth about 50% less in gold than what you sold it for, meaning that if you bought back in, you'd have just given away 1/3 of the proceeds, and besides that you owe tax on the "profit".
Ok, so the dollar just keeps on going and gold goes to $3,200. Do you sell now? What if the dollar simply evaporates and goes to zero? Now, every bit of gold that you sold for a big profit (and owe taxes on) is gone for good. Gone for good.
Be careful to keep what you need if (when) the dollar goes down. You just can't know in advance how far and how fast it'll go.
At what point do you sell your gold, pay the taxes and take that profit?
Here's the problem. You sell half of your gold at, say $1,600 for a heckuva profit. While you are deciding what to do with the money, the price of gold continues on to $2,000.
You think, "Holy Moly, maybe I shouldn't have sold, but you remember that you just made a pile of cash, so it's not too bad.
Then gold goes to $2,400. Now, that cash is worth about 50% less in gold than what you sold it for, meaning that if you bought back in, you'd have just given away 1/3 of the proceeds, and besides that you owe tax on the "profit".
Ok, so the dollar just keeps on going and gold goes to $3,200. Do you sell now? What if the dollar simply evaporates and goes to zero? Now, every bit of gold that you sold for a big profit (and owe taxes on) is gone for good. Gone for good.
Be careful to keep what you need if (when) the dollar goes down. You just can't know in advance how far and how fast it'll go.
Q: Are You Printing Money? Bernanke: Not Literally
I knew it would happen.
I knew it would happen.
0
Comments
Oh, and if the dollar should go to zero, what the hell good is the gold going to do you???
A helluva lot more than the dollars are going to do for me.
I knew it would happen.
<< <i>Oh, and if the dollar should go to zero, what the hell good is the gold going to do you???
A helluva lot more than the dollars are going to do for me.
Sell a little gold here and there but sell your bulk when it hits $8,000 in 2012.
Brazil: rich in natural resources and the country is booming with a young population and attitude and decent leadership. The real was about 3.5:1 in 2003 now it's 1.72:1. It really "sucks" when I go there now and remember what I use to be able to buy. The more I go down there the more I like what I see.
<< <i>Oh, and if the dollar should go to zero, what the hell good is the gold going to do you???
A helluva lot more than the dollars are going to do for me.
There won't be anything to buy with them. No one would win if that was to happen.
Keep me home tomorrow~Now I spent all my PP refund
sell your PM's when the price of one ounce of gold equals the Dow Jones Industrial Average.
Do your research on this,
get your charts,
and you'll see that THIS is the safe and historically correct indicator.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
I hope and pray I'm never put in a position to have to use gold for a doomsday type scenerio.
I think the odds are 37/63 that this will happen. MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I hope and pray I'm never put in a position to have to use gold for a doomsday type scenerio.
Guys, I was trying to illustrate a point. I don't expect the doomsday scenario, (although gold is a better bet than dollars if that happens).
What I was trying to illustrate is the TREND. I was trying to show that as the dollar declines, it puts an individual under pressure to sell his gold for a profit, and in so doing - to pay more taxes and to lose his gold position without gaining anything at all from the selling.
The dollar doesn't have to go to zero for these tendencies to be happening. In other words, it makes much more sense to be putting dollars into gold as they are earned than it does to be buying gold and then selling it for a nominal gain, and then buying it again.
That's all I was trying to show. As for Dubai, who knows?
I knew it would happen.
My reply was only to illustrate that some buy gold to hold forever so we don't sweat it. I treat gold as insurance premiums.
It's only there for....well........I pray I never have to use it. MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Oh, and if the dollar should go to zero, what the hell good is the gold going to do you???
You're missing the big picture. At that point in time barter (including gold-silver-diamonds) will be the alternative currencies. This is the exact point in owning gold in a dollar collapse or severe revalution. Gold will always hold its own short of an asteroid extinction event. In those nations where currencies went to zero (Zimbabwe, Germany, etc.) the ownership of gold was one of the ways to prevent being wiped out. In the end, precious metals, gems, and other tangibles were the only money around.
roadrunner
Yes Yellow Kid, I do pay my taxes in full. In fact, one of the biggest ways to screw up your life is to be charged with tax evasion. Most people pay their taxes, unlike Geithner.
I haven't really sold much in the way of pms for a couple of years, because my strategy changed in spring of '07, so taxes on large gains in precious metals aren't an issue yet for me. If I need to sell pms in order to raise some cash, I will undoubtedly couple my gains with some losing positions in order to come out even in order to minimize any gains and the taxes that would be due on them.
Depending on my tax bracket situation when I do sell, I will tailor the sale of pm assets that have gains to keep from jumping into the next bracket. I will probably wait until my income is much less and my tax bracket is lower (similar to the justification for tax-deferred income in an IRA) before I start selling the stuff that has large gains. If I don't sell, there aren't any gains to tax.
I liquidated my retirement accounts, paid the penalties, paid the taxes and went into physical precious metals with both feet and both hands in summer of '07, and I am happy that I did. I feel that the penalties imposed on "premature" sales of a tax-deferred account are an insult to the people who invested in them, as if mature adults who have saved and invested all their lives aren't capable of making the decision to "get out" when they want to. That's our government at work. It's pure bs.
Being heavy into pms - it's largely a philosophical issue for me, as I no longer believe *any* of the bs that is pumped out by the government and the financial services industry - and I believe strongly in my own ability to gauge the situation in terms of financial markets. I don't need a financial advisor to point me into paper assets that generate the highest commissions for him.
Futhermore, I really DON'T like having my finances out in public for the whole world to see, as they are when you do business on-line, or when you have money in accounts that are electronically-administered. That includes the government's prying eyes, but also every type of scammer around. NO electronic accounts are *really* secure, but I'll tell you one thing - physical gold is. (And so is silver and so is platinum!)
I knew it would happen.
<< <i>Do you people really pay taxes on your gold profits?
Yes Yellow Kid, I do pay my taxes in full. In fact, one of the biggest ways to screw up your life is to be charged with tax evasion. Most people pay their taxes, unlike Geithner.
I haven't really sold much in the way of pms for a couple of years, because my strategy changed in spring of '07, so taxes on large gains in precious metals aren't an issue yet for me. If I need to sell pms in order to raise some cash, I will undoubtedly couple my gains with some losing positions in order to come out even in order to minimize any gains and the taxes that would be due on them.
Depending on my tax bracket situation when I do sell, I will tailor the sale of pm assets that have gains to keep from jumping into the next bracket. I will probably wait until my income is much less and my tax bracket is lower (similar to the justification for tax-deferred income in an IRA) before I start selling the stuff that has large gains. If I don't sell, there aren't any gains to tax.
I liquidated my retirement accounts, paid the penalties, paid the taxes and went into physical precious metals with both feet and both hands in summer of '07, and I am happy that I did. I feel that the penalties imposed on "premature" sales of a tax-deferred account are an insult to the people who invested in them, as if mature adults who have saved and invested all their lives aren't capable of making the decision to "get out" when they want to. That's our government at work. It's pure bs.
Being heavy into pms - it's largely a philosophical issue for me, as I no longer believe *any* of the bs that is pumped out by the government and the financial services industry - and I believe strongly in my own ability to gauge the situation in terms of financial markets. I don't need a financial advisor to point me into paper assets that generate the highest commissions for him.
Futhermore, I really DON'T like having my finances out in public for the whole world to see, as they are when you do business on-line, or when you have money in accounts that are electronically-administered. That includes the government's prying eyes, but also every type of scammer around. NO electronic accounts are *really* secure, but I'll tell you one thing - physical gold is. (And so is silver and so is platinum!)
Don't get me wrong, I respect your financial philosopy and there are many aspects of it that I would agree with. I happen to have all of my assets in IRA tax deferred accounts, when I decide to take out 5k for something, I know I have to make it more like $6500. I do have a lot of money invested in antiques, when I sell a piece off, as I do from time to time, as far as I'm concerned I "broke even" on it and can produce a receipt if challenged, I never will be. The government raked me over the coals my whole working life and continue to do so in retirement, if I can clip a corner here and there I will. I don't lose a seconds sleep or worry about it.
As for the gold holding, it sound like you have made a commmitment to being a PM holder, to keeping all your assets there. Believe me, especially as I grow older that scenario looks better but I have satidfied myself for now by reducing the stock potion of my holdings. Who is right? Only time will tell, it would be nice if we were both here having this discussion in 30 years!!
I would never try to tell someone that they should do what I'm doing, and I only made my moves into precious metals after a continual process of trying to evaluate different outcomes based on what I see going on around me.
The value in this forum is that you can throw up an idea or a viewpoint and then it gets tested and confronted. It doesn't take long to see whether or not your ideas can hold water, and it helps to know where one's thinking might be going awry. Nobody is always 100% right. I know this because I thought that I had made a mistake once, but I was wrong.
I'd be extremely pleased to be having this conversation in 30 years! That means that I haven't become senile and that my ticker is still ticking!
I knew it would happen.
and relax. What ever is going to happen whether you worry
about it or not. Not everyone can afford the policy of buying gold
and keeping it forever. Some of us have got to use some of that
money for food, medical, housing and to help our kids make it.
.
Do what you feel is best for your family and have no regrets.
Camelot
<< <i>Sell half, keep half and then go about your normal bussiness
and relax. What ever is going to happen whether you worry
about it or not. Not everyone can afford the policy of buying gold
and keeping it forever. Some of us have got to use some of that
money for food, medical, housing and to help our kids make it.
.
Do what you feel is best for your family and have no regrets. >>
Bear you are right on! You've got it together when you say "help our kids make it." That's what it is all about! I'm on vacation this week, very southwest Texas, going to see if I can pick up some fractional gold for the kids for Christmas. Would be a nice stocking stuffer.
It's when I dont have to pay taxes (and have no profits on sales) that I hate.
www.AlanBestBuys.com
www.VegasBestBuys.com
<< <i>Sell half, keep half and then go about your normal bussiness
and relax. What ever is going to happen whether you worry
about it or not. Not everyone can afford the policy of buying gold
and keeping it forever. Some of us have got to use some of that
money for food, medical, housing and to help our kids make it.
.
Do what you feel is best for your family and have no regrets. >>
My PM funds had experienced a had a great run up back before the latest market debacle, I did what Bear suggests here and sold half, put the profit into money market. If this latest move turns into a money maker without being catastophic( I believe we can have a gold bubble or run up that won't affect the other financial markets adversely) I will take my profit at some point and buy a nice coin!
<< <i>it's very simple guys...
sell your PM's when the price of one ounce of gold equals the Dow Jones Industrial Average.
Do your research on this,
get your charts,
and you'll see that THIS is the safe and historically correct indicator. >>
would you receive yours in Canadian dollars?
only half tongue in cheek aboot the Canuck currency, but yeah that would be THE time to liquidate PM, or somewhere 10% to it.
could this scenario really happen in a global economy though with many USA based companies investing and working overseas
I once "peeled the onion" of a stock option package for over ten years, selling a few percent of my holdings at each new high.
(had I held it all until now, I'd be writing this from my winter chalet instead of my tract home)
Liberty: Parent of Science & Industry
Little over a month ago I was asked to teach a class about US money. Actually, I offered to do it because kids today have no clue to its value and history. It was to a high school American history class.
The main thrust of the class was how much our dollar has lost its value. I started with bartering in the 1600's and went into today's fiat system. I explained how our money had intrinsic value. How our money had slowly been debased and devalued. And I talked about the Fed, FDR, Bretton-Woods, Nixon... I had 50 minutes. I thought, no way could I do it in 50 minutes and before lunch. I brought in many props including coins...gold, silver, merchant tokens, silver certificates..... I handed them out to be looked at. After 50 minutes no one left. At 1 hour 15 minutes a young lady got up to go to lunch and that's when I got the clue to wrap it up. At the end I passed around a bag of circulated "Mercuries" and told them to take one.
Afterward four teachers came up to me and said they had never seen their students so quiet and polite. A couple of students stayed afterward and wanted more info. I think I hooked a few students or at least got them to think.
I wish I could do this for all high school students seeing how they are going to inherit a big "sheit" sandwich.
R95
Liberty: Parent of Science & Industry
<< <i>You do know of course, that at some point it will come crashing down, if you haven't taken your profit then you can spend your time thinking about what might have been.
Oh, and if the dollar should go to zero, what the hell good is the gold going to do you??? >>
??? If the dollar goes to zero (god help us all) there are still people with other currency that can buy your gold. I will always and always has had value since recorded time. I would rather take my chance with gold and silver over paper. IMHO
Fred, Las Vegas, NV
<< <i>
<< <i>You do know of course, that at some point it will come crashing down, if you haven't taken your profit then you can spend your time thinking about what might have been.
Oh, and if the dollar should go to zero, what the hell good is the gold going to do you??? >>
??? If the dollar goes to zero (god help us all) there are still people with other currency that can buy your gold. I will always and always has had value since recorded time. I would rather take my chance with gold and silver over paper. IMHO >>
Do you have any idea what things would be like if our paper money became worthless? The social order begins to break down around the third day of a calamity, what would "no money" do? Do you think Walmart will have a section open for those with silver? Or that the corner gas station, who has no way to pay for deliveries is going to sell you gas because you have some gold coins? It will be absolute chaos with troops on every corner and government rationing of everything, there won't be anything to buy. I read some of these postings and it seems as if some people think it will be fine if they have some PM socked away. Okay, I'll grant you better than nothing, but in a worthless script scenario not much better.
may be you should tape it or dvd it now days
and it if you can get it into the system i'm sure someone here would know how to go about it
just a thought
Some coins have gone up and some down over the span of 30 years (that's a guess). Paying taxes on a hobby is something I never gave any thought to. I have whitman folders from the 60's in every denomination. At what point does a hobby become a taxable event? I'll have to look into that one day, call the CPA about it.
You probably don't want to hear this, but - I think you'd better talk to your CPA soon. I am pretty sure that if you or your heirs sell your coins for a tidy sum, if there is no documentation the IRS will assume that the coins are 100% profit (anything over face value) and 100% taxable. This makes it very important to document what you pay for any coin that is worth something when you buy it.
I bought a new watch in 1986 for $995. It's now worth over $15,000 which I find very bizarre, it's all stainless steel, no gold or gems. Never figured a watch would go up in value after being used 23 years. Rolex Daytona.
If you were to sell that sucker, you would owe income taxes on the $14,000 gain, and it might even boost your income for the year such that you land in a higher tax bracket!
BTW, since coins are a hobby, if I bought a coin and sold it for a $5,000 loss, would that be treated like a stock loss deduction? I'll have to review hobbies and taxes one day in the next decade down the road.
I believe that you could offset any gains for the year with that loss, but I am not sure whether or not you could carry the tax loss forward to other years.
I knew it would happen.
<< <i>
<< <i>
<< <i>You do know of course, that at some point it will come crashing down, if you haven't taken your profit then you can spend your time thinking about what might have been.
Oh, and if the dollar should go to zero, what the hell good is the gold going to do you??? >>
??? If the dollar goes to zero (god help us all) there are still people with other currency that can buy your gold. I will always and always has had value since recorded time. I would rather take my chance with gold and silver over paper. IMHO >>
Do you have any idea what things would be like if our paper money became worthless? The social order begins to break down around the third day of a calamity, what would "no money" do? Do you think Walmart will have a section open for those with silver? Or that the corner gas station, who has no way to pay for deliveries is going to sell you gas because you have some gold coins? It will be absolute chaos with troops on every corner and government rationing of everything, there won't be anything to buy. I read some of these postings and it seems as if some people think it will be fine if they have some PM socked away. Okay, I'll grant you better than nothing, but in a worthless script scenario not much better. >>
Did you miss the part about "God help us". First Walmart would have cleared shelves and people walking around with guns. At the end of the day some sort of organization will form or take over. At that point as has already been pointed out people will barder and get by the best they can. Again if this happens I will feel alot better with silver or gold coins stashed instead of the worthless paper. I will give you an example if you had a hoard of gold and silver during the civil war and lived in the south. Once the dust settled the paper money was toliet paper, gold and silver still had value. Each person needs to determine what makes them sleep better at night. For me it is not paper stock or dollars at this point in time.
Fred, Las Vegas, NV
<< <i>REM
may be you should tape it or dvd it now days
and it if you can get it into the system i'm sure someone here would know how to go about it
just a thought >>
I've thought about that, but I would have to hire an actor. Regular people like to see the "beautiful people" perform.
nope the facts are as the facts are you'll tell them best
just my thoughts
roadrunner