Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Want To Earn A Safe 5% In Fixed Income? Buy Preferred Stocks - 24th April 19
Can Gold Price Rise Without a Rate Cut?  - 24th April 19
Silver’s Next Big Move - 24th April 19
How Can a College Student Invest Wisely? - 24th April 19
Prepare For Unknown Stock Market Price Action As New Highs Are Reached - 23rd April 19
Silver Plays a Small but Vital Role in Every Portfolio - 23rd April 19
Forecasting 2020s : Two Recessions, Higher Taxes, and Japan-Like Flat Markets - 23rd April 19
Gold and Silver Give Traders Another Buying Opportunity - 23rd April 19
Stock Market Pause Should Extend - 21st April 19
Why Gold Has Been the Second Best Asset Class for the Last 20 Years - 21st April 19
Could Taxing the Rich Solve Income Inequality? - 21st April 19
Stock Market Euphoria Stunts Gold - 20th April 19
Is Political Partisanship Killing America? - 20th April 19
Trump - They Were All Lying - 20th April 19
The Global Economy Looks Disturbingly Like Japan Before Its “Lost Decade” - 19th April 19
Growing Bird of Paradise Strelitzia Plants, Pruning and Flower Guide Over 4 Years - 19th April 19
S&P 500’s Downward Reversal or Just Profit-Taking Action? - 18th April 19
US Stock Markets Setting Up For Increased Volatility - 18th April 19
Intel Corporation (INTC) Bullish Structure Favors More Upside - 18th April 19
Low New Zealand Inflation Rate Increases Chance of a Rate Cut - 18th April 19
Online Grocery Shopping Will Go Mainstream as Soon as This Year - 17th April 19
America Dancing On The Crumbling Precipice - 17th April 19
Watch The Financial Sector For The Next Stock Market Topping Pattern - 17th April 19
How Central Bank Gold Buying is Undermining the US Dollar - 17th April 19
Income-Generating Business - 17th April 19
INSOMNIA 64 Birmingham NEC Car Parking Info - 17th April 19
Trump May Regret His Fed Takeover Attempt - 16th April 19
Downside Risk in Gold & Gold Stocks - 16th April 19
Stock Market Melt-Up or Roll Over?…A Look At Two Scenarios - 16th April 19
Is the Stock Market Making a Head and Shoulders Topping Pattern? - 16th April 19
Will Powell’s Dovish Turn Support Gold? - 15th April 19
If History Is Any Indication, Stocks Should Rally Until the Fall of 2020 - 15th April 19
Stocks Get Closer to Last Year’s Record High - 15th April 19
Oil Price May Be Setup For A Move Back to $50 - 15th April 19
Stock Market Ready For A Pause! - 15th April 19
Shopping for Bargain Souvenirs in Fethiye Tuesday Market - Turkey Holidays 2019 - 15th April 19
From US-Sino Talks to New Trade Wars, Weakening Global Economic Prospects - 14th April 19
Stock Market Indexes Race For The New All-Time High - 14th April 19
Why Gold Price Will “Just Explode… in the Blink of an Eye” - 14th April 19

Market Oracle FREE Newsletter

Top 10 AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

How to Make Tax Day Less Painful

Personal_Finance / Taxes Apr 06, 2019 - 02:01 PM GMT

By: MoneyMetals

Personal_Finance

As Tax Day approaches, millions of Americans are becoming increasingly filled with panic and dread.

The Trump tax cuts may offer some relief. But not everyone will benefit greatly from them. A few could even see a higher tax bill for 2018 thanks to newly imposed limits on certain deductions.

The tax code itself remains absurdly complicated, needlessly invasive, and patently unfair. Some of that unfairness targets precious metals investors in particular.


For example, the tax code arbitrarily treats capital gains on all forms of physical precious as “collectibles.” For no good reason, the IRS taxes collectibles at a rate of 28% instead of the lower rates that apply to long-term gains on real estate or paper assets such as stocks.

Still, physical precious metals can be tax efficient investments if held the right way.

Since a gold or silver coin pays no interest or dividends, it never generates any tax liabilities unless and until you sell.

By contrast, stocks, bonds, mutual funds, and exchange-traded products (including those that purport to track metals markets) can issue taxable distributions that you literally can’t refuse.

The IRS will be notified of all the interest and dividend income you receive. It will know about any sales of financial assets that generate capital gains or losses. Your financial records can potentially be perused by other third parties such as trial lawyers – or hacked into by data thieves.

Physical precious metals purchases and sales almost never generate such records. Except in very rare circumstances, coin dealers file no tax forms with the IRS or transaction reports with other government agencies. Unlike paper assets, bullion can be held privately.

This isn’t to suggest that you should avoid reporting any capital gains on bullion that you are legally required to report! Fortunately, there are legal ways to shelter your gold and silver gains from taxation.

Legally Skirt Unfair Taxes with a Precious Metals IRA

One of the most straightforward and effective ways to shield metals’ gains from taxes is through an IRA.

Stock brokers and financial advisors aren’t necessarily keen on informing their clients of this opportunity. But in fact, you can hold certain non-financial tangible assets – including IRS-approved gold, silver, platinum, and palladium bullion products – inside a Self-Directed IRA.

Your bullion will typically be held on your behalf by a custodian (this article goes over the nuts and bolts of selecting an IRA custodian and funding the account).

Within the IRA, you can sell some or all of your holdings, trade one metal for another, or even switch the account back to conventional financial assets with your bank or brokerage house – all without tax consequences until you actually take withdrawals.

When it comes time to take distributions, you can do so by taking possession of your actual IRA coins, if you wish.

It is still possible to contribute to an IRA for tax year 2018 before the filing deadline. The maximum individual contribution to a traditional or Roth IRA is $5,500 ($6,500 if over age 50). For tax year 2019, you can contribute up to $6,000 ($7,000 if over age 50).

Sound Money Advocates Make Progress on the Tax Reform Front

When it comes to taxation of precious metals at the state level, laws vary widely. Some states impose no sales or income taxes on Constitutional money. Others treat gold and silver as a revenue source.

The good news for metals investors is that in recent years several states have passed, or are currently considering, legislation to exempt precious metals from taxation. For example, in March, the West Virginia legislature voted to remove sales taxes on retail precious metals products, and the governor just signed the bill into law.

Meanwhile, West Virginia Congressman Alex Mooney is working to reform the U.S. tax laws in Washington, D.C.

Earlier this year, Mooney introduced the Monetary Metals Tax Neutrality Act (H.R. 1089). This bill would “clarify that the sale or exchange of precious metals bullion and coins are not to be included in capital gains, losses, or any other type of federal income calculation,” according to the Sound Money Defense League.

Mooney argues that since the U.S. Constitution recognizes gold and silver as legal tender, the government should not be taxing money itself. Exchanging a dollar for four quarters isn’t a taxable event, so why should exchanging a gold coin into its equivalent in dollars be taxable?

His fellow lawmakers have no good answer. Unfortunately, House Speaker Nancy Pelosi and her partisan minions in the deficit-spending Congress don’t much care about sound money principles. And they surely don’t want to give up any revenue sources.

If any tax reforms favorable to precious metals investors are to come out of Washington anytime soon, they will likely have to be enacted at the administrative level.Text Box: Rep. Alex Mooney (R-WV) has become the new Sound Money leader in Congress.

President Donald Trump could, for example, demand that the Internal Revenue Service either justify or abandon its unfair treatment of the money metals as “collectibles.” He could also instruct his Treasury Department to clarify the legal tender status of gold and silver coins produced by the U.S. Mint and issue new rules exempting them from taxation.

In the meantime, metals investors should consult their tax advisors and consider every legal maneuver currently available to keep more of what is theirs.

Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2019 Stefan Gleason - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules