Reportable to IRS

How much bullion/collectable coins can a person purchase from a dealer before it is reported to the IRS?

 

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I don't think it's how much you purchase, but what profit you made. Which would be anything over a fraction of a cent and would be reported on your state and federal income tax returns for the year you made a profit.

I know that there are treasury regulations regarding entering and leaving the United States with more than $10,000, but I don't believe those regulations apply to strictly internal possession and transport.

 

I think he means how much before the dealer has to report your purchase to the government.

 

Since you are here in OKC, call Jerry down at Brown's Coins and ask him. I would think that it would depend on whether or not you sold it.

I just turn everything over to my CPA.

 

What are the actual IRS regulations?

Obviously, if the dealer suspects money laundering or some other illegal activity, sure, it should be reportable :loud: to an appropriate law enforcement agency.

But what about a single very expensive, coin transaction? Does the guy who just bought the Olsen(?) 1913 Liberty Head nickel have to report it to the IRS?
If my collection is worth $1,000,000 (I wish), does the dealer I bought it from have to report it?

 

Supposedly any gains from bullion or coin sales needs to be reported to the IRS each year as capital gains, but you do not need to declare any purchases. Only when you sell.

 

If you pay in cash in a single transaction or series of related transactions the dealer is required to report amounts of $10,000 or more. (See IRS form 8300 instructions.)

http://www.irs.gov/pub/irs-pdf/f8300.pdf

If you pay by personal check or credit card then any amount your purchase will be "reported" to the IRS if your dealer is ever audited.

 

The only purchases that would be reportable to the IRS would be purchases made with $10,000 or more in cash. Then too, the dealer is supposed to report cash purchases of less than $10,000 if they are "suspicious" or are a part of multiple purchases of less than $10,000, structured to avoid the $10,000 rule. Of course, I've been retired for a few years, so that may have changed - I'd check with a professional.

 

yup.
well said.

Otherwise, use a check or charge card and $80 trillion wouldn't be reported.

 

For many years I purchased a five to six figure amount of certified coins from one of this countries largest international wholesale/retail trading houses, and was informed in writing that any annual accumulated amount equaling $10,000, was required to be reported. I was informed of the same for series EE US bonds (face value), or cash bank deposits.

 

Love it Frank...LOL.

 

The point to the regulations is to stop the laundering of money from the underground economy, be it a legal or illegal activity - or if not stop it, at least tax it. Often large amounts of cash that are used to complete transactions, are from unreported and/or illegal sources. On the other hand, if one uses a check or charge card to complete the transaction, the cash has already entered the system via a bank deposit or would be reported if one tried to pay a credit card bill with $10,000 or more cash, serving no purpose to someone attempting to launder their earnings.

 

However if you purchase $9,999.00 nothing need be reported you know. I've made many purchases over the years at coin shows and so far I've never asked folr nor offered a receipt. I've never seen anyone asking for a receipt. I've seen some dealers attempt to give someone one and the customer would either say no reciept or just walk away if it is insisted. I know there are rules of the amount and I'm sure that many dealers follow those rules if possible. But if a customer hands a dealer $15,000 in cash, I doubt he would insist on recording that transaction if the customer says so. Around me coin shows are basically like a flea market and no one keeps any kind of records there. I've seen individules with entire truck fulls of merchandise and no one is keeping track of anything. There are many, many rules of taxes and there are just as many people ignoring them.
That $9,999.00 I mentioned is just as possible as many other laws. For example there is law that says if you have an antenna 300 feet tall, you must have a flashing light at the top. Many organizations make their towers 299 feet tall.

 

I understand some do ignore the law. However, if they're caught, there are consequence. I'd say each dealer should comply with the law and if they don't, they have to decide if completing the transaction is worth possibly paying the penalty. It's the buyer getting away with something and the seller taking the risk.

Carl, take a look at post #8. Paying $9,999 does not free the seller from reporting the transaction - that transaction should be considered suspicious.

 

Well, lets keep an eye out for those suspicious, money laundering, bomb throwing coin collectors....

 

I know this will be the equivalent of me throwing a grenade into a tea party, but just because a purchase of over 10K may be made doesn't throw a spotlight on you for tax purposes. Many people who stockpile bullion never sell for decades. Many never sell at all. How many actually report gains to the IRS, and how would the IRS know if someone didn't. I'm not advocating anyone break the law, but how many here can say with a straight face they report every single sale, and we all know we sell for a profit? That reportable purchase is meaningless in all practical sense, unless you're a dealer.
Guy~

 

I understand what you’re saying about reporting gains from sales, but that’s an entirely different issue all together. The question asked and answered here is about purchases made with cash. If one makes a purchase with a large amount of cash and a Form 8300 is filed, a huge spotlight is thrown on that person. It’s my understanding most, if not all of the 8300’s are reviewed and many are followed up on.

 

As much as you like as long as you don't pay cash. Any purchase exceeding $10,000 and upward must be reported whether it's $5,000 today and $5,000 tomorrow it's reported. If you pay by check or wire then there's no limit.

 

It has everything to do with it. There may be a form filed, but no taxes are due until there is a sale. If that sale isn't reported, that form is meaningless because the IRS has no way to prove a transaction in which the seller made gains took place. That makes the reportable transaction of over 10K virtually meaningless to those who have no intentions of either selling or reporting the proper information come tax time.
Guy~

 

I see your point, the filing of a Form 8300, would notify the IRS that the seller had a sale – but, even sans the 8300, the IRS has ways to prove the seller made that sale. On the other hand, the purpose of the 8300 is to catch the buyer, who without the 8300 could disappear leaving no paper trail of the transaction. See post number #12 for the main purpose of the reporting requirements.