Reporting gold sales to the IRS

BigE

Just saw this on a website:

"We are required by law to report your sale of 25 or more ounces of Krugerrands on I.R.S. Form 1099B"

Is this true?--------------------------BigE

Weiss

If it is, but someone on a coin collecting forum tells you it isn't, will you try to use that defense when the IRS audits you?

Don't ever, ever take the word of anonymous posters on a public forum when it comes to tax rules. Ask an accountant, or ask the IRS.

OPA

I believe, any PM transaction over 10K requires, I forgot what the name of the form is, to be reported to the IRS ( has to do with money laundering)

BigE

<< <i>If it is, but someone on a coin collecting forum tells you it isn't, will you try to use that defense when the IRS audits you?

Don't ever, ever take the word of anonymous posters on a public forum when it comes to tax rules. Ask an accountant, or ask the IRS. >>




Ummm, I wasn't born yesterday-------------------BigE

BigE

Its right here, scroll down to about krugerands www.golddealer.com Seems that this isn't mentioned on other gold bullion rounds------------BigE

NitroCruiser

I believe money laundering comes into play only if you pay $10 or more in cash. Most PM dealers require a check, CC or bank draft on large purchases, so that get them off the hook, and places it on your bank (I believe they have to inquire if you deposit $10K or more in cash). Not sure about the dealers that do take cash, perhaps they have a form for you to sign. Even car dealer do that.

Disclaimer: The above is my opinion only. Consult your tax adviser for your personal financial matters. I never have $10K to lay down on PM's at a given time.

jmski52

Homeland Security is only interested in cash transactions $10,000 and over, even if spread over several days. Checks don't get the wrong kind of attention, though.

IRS, however wants to know anytime you've made a profit, on anything. That's just the way they are. You're always better off if you know how much you paid and have the records to prove it.

CaptHenway

ICTA can answer all of your questions.
Join and support ICTA.

To answer the OP, yes, if someone sells 25 one ounce KRs to a dealer the dealer is required to file a 1099 form.

TD

AboutAg

<< <i>Just saw this on a website:

"We are required by law to report your sale of 25 or more ounces of Krugerrands on I.R.S. Form 1099B"

Is this true?--------------------------BigE >>



We just added a page about this at http://about.ag/reporting.htm, since this is one of the areas where misinformation is more common than real information (and all those guesses disguised as truths -- Weiss's 'Don't ever, ever take the word of anonymous posters on a public forum when it comes to tax rules' comes in handy here).

The truth is a definite, guaranteed maybe!

An IRS Form 1099-B is used by brokers (in other words, the form doesn't apply to individuals). They are required to report sales in an amount and type that meets a commodities contract. The catch here is that the '25 ounces of gold coins' contract isn't traded anymore by any exchanges. The IRS implies that amounts meeting the obsolete contracts should be reportable, but I doubt that legally they can enforce that (*but* I wouldn't recommend anyone voluntarily get into trouble with the IRS!). Why? The exchanges that used to trade them no longer provide the contract specifications, nor does the CFTC (the government agency that approved them). If the government does no longer supplies information needed to comply with a law, I can't imagine the law could be enforceable (but, it is the IRS, and would cost you a huge sum of money to fight them in court).

With all the talk about the 25-ounce gold coin contracts and $1000FV silver bag contracts, we've sent a FOIA request to the CFTC to find out for certain what the contract specifications were (they didn't respond to our normal inquiry within several weeks), so that people will at least know what *may* be required to be reported.

Of course, you could sell groups of 20 1-ounce Krugerrands to various dealers, and none would need to report it (but you can't do that with a single dealer; they are required to report if they have reason to believe you are trying to avoid the reporting requirements).

Note that some dealers do not report at all. I have no idea what the penalty is for them for not complying. But there isn't any penalty to *you* if they don't comply. Of course, regardless of whether or not they report it, you're still required to report any gains on your tax return.

BAJJERFAN

If I buy 100 one ounce gold eagles from Apmex they are not required to report it?

AboutAg

<< <i>If I buy 100 one ounce gold eagles from Apmex they are not required to report it? >>



The only way they would need to report it is if you paid cash (bills, a money order, or cashier's check I believe). If you pay by personal check, credit card, or bank wire they do not have to report *any* amount they sell to you.

The logic is pretty simple. The government wants to know two things here: [1] Are you evading taxes? (hence the reporting of some of the large sales from individuals to dealers), or [2] Are you laundering money? (hence reporting $10K or larger transactions).

In fact, the IRS would probably not want to have a record of what you paid -- when you sell, if you can't find out what you paid, you might end up reporting a basis of $0, paying taxes on the whole sale (rather than just the profit you made).