The tax laws on selling silver.

I'll start by saying, I have to stay within the tax laws on everything I do. My folks raised me to be honest and stay within any laws. So here are my questions.

Lets say I go to my local coin shop and trade silver bullion or coin silver for coins I collect. I'm thinking there would be nothing to report at that point but the new coins would have the cost basis of what I paid for the silver used in the trade.

Do coin dealers have any reporting requirements if the trade is over 10K?
Is my thinking correct? I will run all of this by my CPA at some point but I'm not sure he will have a full understanding on the topic.

 

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I don't know much about tax law, but what I do know is that common sense is not applicable.

I think in a barter exchange it's accounted as if you sold the stuff you're trading away for fair market value, and then spent that fair market value in cash.

I found this IRS publication, which links to the 1099-B-for-Brokerage-or-Barter form...

 

In the long run being honest pays. I always declared my side income and paid the self employed 14% social security tax. It helped a lot when determining my monthly payment, especially since it balanced out the few lean years in my mid twenties when I had no income. Also, declaring the side job income allowed me to set up a SEP IRA which has been a great help in retirement.

 

Currently there are no tax laws for trading coins, only capital gains taxes for selling above $10,000 per transaction.

 

You're parents raised you right... I'm sure the government overreach was still cheating people in their day.
Just remember no one ever makes money selling PM's

 

Did any of the previous administrations pay taxes on their gains???
Develop their mindset, What gains?...What money?

 

Alfred E Neumann
What me worry?

 

Please stop. Your words could get this thread locked.

Thank you to those that were helpful. I can see now that my cost basis will not carryover to the new coins. Knowing that the dealer must report it and reading the 1099-B form were a big help. I think my best bet is to let the silver pass on to my son. His cost basis will be market value as of the date I pass. It would have been cool to turn the silver into just a few coins without the worry of taxes.

 

It really kind of sucks, but that didn't used to be the case. It used to qualify as a Section 1031 tax free exchange. Under the Tax Cuts and Jobs Act, of 2017, Section 1031 now applies only to exchanges of real property and not to exchanges of personal or intangible property.

That being said, this transaction happened 10 years ago? But once again, cash is king, it never happened.

 

I believe you'll find that tangible commodities aren't "traded" they are purchased and sold minimally at a "fair market value".

I have on multiple occasions lost the bags of pre-paid Silver coins being purchased and resold by a coin dealer who wasn't collecting "Sales Tax".

The "Dealers" filed Bankruptcy, and restarted their business, after the State confiscated their inventory!

I dealt with Hannes Tulving for many years finding him to be the finest "Dealer" I'd met, where we would "trade" with each other, without a tax filing.

I believe he was imprisoned for actions that others escaped by filing Bankruptcy:
https://www.cftc.gov/PressRoom/PressReleases/7875-19

I believe a fair "Jurist" realized the individual sincerity, and sentenced him as lenient possible.

 

I am of like mind, Larry. But when bulk silver is involved, showing ownership will be important when our heirs sell. Keep in mind that many dealers either do not give receipts, or the receipts do not name the buyer. If heirs cannot establish legal ownership, then who is to say that the silver was in fact part of your estate?

 

Reading the form, I kind of doubt the linked 1099-B applies. A coin dealer would not be a registered broker nor a barter exchange.

 

If you're trading silver for coins, what else could it be but a "barter exchange"?

 

Only been two times I carried a stack of junk silver coins to my dealer. Both times he asked me if I wanted a receipt.... Didn't matter anyway because I used the funds to buy coins from him anyway.

 

I've bought coins from one of my local coin dealers. I for some reason asked if there was a receipt. He said if I wanted a receipt he'd have to charge me sales tax!!!

 

Do I need to report bank interest less than $10?

Reporting under $10: Even if you earned less than $10 in interest and didn't receive a 1099-INT, you're still required to report it. While the IRS might not pursue such small amounts aggressively, it's best to be thorough and avoid any potential issues.Jan 20, 2025

The IRS is intending to employ individuals who may have problems with normal employment, as disabled, Veterans, etc.. because tax evasion has required them to imprison virtually all hardened criminals!

The IRS aimed to hire around 20,000 employees in FY 2024, funded by the Inflation Reduction Act (IRA), to improve taxpayer services and bolster tax enforcement, especially on wealthy individuals and corporations.

Several high-profile individuals, including Al Capone, Wesley Snipes, and Dennis Kozlowski, have faced imprisonment for tax evasion, highlighting the severity of the crime and its impact on individuals and society

 

A "Coin Dealer" who isn't a "registered broker", dealing in Minnesota, may be found in violation of improper interstate commerce (MN Bullion statute), and imprisoned!

 

Apropos of nothing I said.