NEW TAX requirements on gold sales over $600 (THIS IS A BIG DEAL)

http://abcnews.go.com/Business/gold-coin-dealers-decry-tax-law/story?id=11211611
Apparently starting in 2012 there will be some heavy duty reporting requirements associated with the sale of gold over $600. This could be a bad thing.

 

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Bad thing in what way? I pay taxes on my gains. Why shouldn't everyone? But maybe I'm missing somehting here.

 

It's an additional cost to the dealers to prepare the 1099s and a lot more time spent on paperwork. This has nothing to do with taxes on gains. It's a requirement to issue a 1099 for purchases over $600. What if you have 5,000 sales transactions during the year and it takes 30 minutes to prepare each 1099. Add it up. It's a lot of time and money.

 

Seems like it has everything to do with taxes on gains. If people weren't cheating on taxes, there'd be no need for the bill and no need for a dealer to put in 2500 hours doing 1099's.

 

It has nothing to do with reporting gains. It is issuing 1099s to every person you buy $600 of merchandise from so that the IRS can theoretically match it up to the revenue they report on their business tax return. This puts the burden of the paperwork on the buyer to collect tax ID information from everyone they buy from and doing a mountain of paperwork.

The "good" news is that nobody is going to every have to pay taxes again because the requirement will probably put them out of business.

 

I read this weeks ago and Cloudsweeper is right on. If a coin shop has to fill out a 1099 for every transaction over $600 we may as well all take paycuts and stay open longer to keep up with the paperwork.

The shop I work in is larger than many in the immediate area but by no means large. We do deal in gold on a daily basis though and $600 at current rates is a drop in the bucket.

Now extrapolate to the large bullion dealers like Apmex for example. How many $600 transactions do they have in any given day let alone year?

May as well start cutting down more trees to supply the paper we'll need to fill out 1099s.

 

Don't just complain about it, YOU should take some action!

Find your district house representative. It's easy, go here: http://www.house.gov/
TOP LEFT CORNER- enter your zip code and your rep's info comes up.
CALL THAT NUMBER, GET AN EMAIL ADDRESS FROM THE NICE PERSON ON THE OTHER END OF THE LINE
EMAIL YOUR REP!

If you can't write something on your own, feel free to copy and paste what I have written to my own rep:

Hello XXX,

I am a voting member of your district. I am a coin collector and concerned about some unintended circumstances to my hobby that, unexpectedly, stems from the passage of the national health care bill. It seems that a 1099 form will have to be filed for transactions above $600 beginning in 2012. I can only imagine that this will have disastrous consequences to many of the avid dealers and collectors in coin and bullion (numismatists).

From information obtained through a circle of friends and associates, I understand that there is a bill introduced by Rep. Dan Lungren (H.R. 5141), which has gathered over 80 members of Congress as co-sponsors to repeal the section which affects these transactions.

Can you please tell me if you are familiar with Rep Lungren's bill? If so, do you support it? If you are not familiar, is it important enough to you to learn more about this? And, sorry for so many questions, but can you tell me that if you do support it, would you be willing to take extra measures so that both sides of the aisle can see how this affects small guys like me?

For reference, this link will take you to an article regarding just a smattering of what I've come to learn about this subject: http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=11843

If I can be of assistance in helping you to gather more information, please let me know.

Thanks for your time,

XXX

It's EASY to do this... easier than writing posts on a forum where the audience already supports you. YOU have to take action to get this information into the hands of the people who represent you in government. That's how the system works... congress is not going to read our forum.

 

I'd like to get this clarified by someone who's knowledgeable on this, as I am a bit confused as to who exactly should fill out this 1099 form - should it be: (1) the person who buys a coin worth > $600? or (2) the person who sells a coin worth > $600 or (3) both?

In case of (1), is the seller's info also collected and reported by the buyer?
In case of (2), is the buyer's info also collected and reported by the seller?
In case of (3), well, then it really doesn't matter...

So, can anyone figure out clearly the (1) (2) and (3)?

 

When you sell anything to anyone that is more than $600, then the BUYER will collect your name, address, social security number and will submit a 1099 form to the IRS and to you at the end of the year with this information. Then, if you do not report this as income, the IRS will come after you for taxes owed. Additionally, you will need to KEEP RECORDS of your purchases and expenses, or else the IRS will treat the gross income from the sale of your items as NET INCOME... and you will be responsible for the entire amount of the sale.

FOR EXAMPLE:

You buy a coin for $550 in year 1, and incur additional expenses of $5 to purchase this coin.
You sell the coin in year 2 for $650 and incur additional expenses of $10 to sell the coin

Total expense, $565
Total revenue, $650

NET INCOME, $85... you will be responsible for capital gains tax on that $85

HOWEVER!!! If you do not report the price paid and the expenses incurred to make the transactions, then the IRS will make you responsible for capital gains tax on $650!!!!!

This is VERY SERIOUS stuff, folks. YOU NEED TO TAKE ACTION ON THIS!!!!!!

 

Edited by me because it might be too political

 

But you forgot to make it red.

 

Red, white, and blue......

 

This sucks. I was all excited when I found a bag of 40% silver halves but now I'm thinking I am going to have to pay a gain on whatever I sell the coins for (minus the 50 cents per coin I had to pay). I guess I could write off the gas to drive back an forth to the bank. Maybe I'll do an exchange with a bullion dealer for something else. I could get about 4 AGE's for it.

 

paperwork nightmare

 

Also some are concerned with the feds having records on how much gold each citizen holds (I think you know why)

 

Stop whining you rich fools!!! By then gold will rise so high..itll be ok. All the money that was given to bail out everybody is due really soon...and I really dont think they have it to pay back.

 

But this is the digital age...

 

I agree. There are no gains if you just buy, for one thing. And I'm sure coin shop owners will just continue what they've done to avoid filling out the forms with the current $2000 limit, which is break it up into smaller purchases, as there is no limit on total amounts, just single amounts. I don't see anything changing.
Guy~