Hi all! Been along while since Ive posted here(long since forgot my old login). Feels good to be back though Sort of off topic from coin talk, but I respect the diverse opinions and input I get on this forum. My question pertains to bullion investing. Has anyone ever used one of those broker-free services such as The Anglo Far-East Bullion Company or Kitco? It seems in a way better than having physical bars or rounds shipped to myself and then having to store them. Minimal fees on guaranteed buy backs also. So any experience out there with these services?
I would just caution that unless you either (1) have physical possession or (2) have a certificate of ownership with the serial numbers of the bars that you own recorded on it, similar to what you would receive from the Comex warehouse if you took physical possession, you don't really own silver. What you own is a pooled account and the promise of the seller to deliver silver to you upon demand. The promise is only as good as the financial condition and integrity of the firm. If you are only paying minimal fees with no storage or insurance costs, there probably isn't any silver -- there's no free lunch and those guys aren't in business to lose money by doing you a favor and eating the expenses. You would be better off buying the silver ETF [SLV] because at least they have silver verified by audit.
Howdy, Concur with cloudsleeper. I wouldn't trust too many folks with my bullion. With smaller amounts, you can buy it and store it yourself. Cripes, $25K worth of gold could fit in most water glasses. Silver's a little more space intensive, but a 100 oz bar is what, 3x4x0.5? Ergo, for reasonable amounts, you could stash them any number of places in your house. If not your house, your local safety deposit box. Otherwise, I'd go with either one of the bullion Exchange Traded Funds like SLV (silver) or IAU or GLD for gold. These you can purchase via any online brokerage and have a solid paper trail. These are ETF's so they trade like stocks. You can also buy the closed end fund called Central Fund of Canada CEF which owns bullion in 60/40 gold/silver split. Unlike the ETF's which are considered collectibles by the IRS and gains taxed at 28%, CEF is a mutual fund and has never been singled out by the IRS for special treatment - ergo, it's still taxed at 15% long term cap gains and short term at your marginal tax rate. There are also several mutual funds which hold some bullion, but they're rare and the amount they hold is not a lot. Just some thoughts, rono
Bullion Hello to all. I am new to this site but not new to Silver and Gold. Both bullion and Numismatic. I hope to share and learn from our collective experiences. I have done business with Kitco as well as Apmex and Bullion Direct. I always insist on physical possession. However I do most business with local dealer's that I've been with for a few decades. This way there is no paper work, I pay cash and take my purchase home. No paper trail. If they don't know that you have it , they won't go looking for it, As mentioned above, You can cram allot of gold in a very small place. Silver on the other hand can and will become overwhelming. But not impossible. I have a few safes yet I don't keep all my metals in them. That would be the first place someone would look. I keep a handful of silver rounds in each. In the event that someone has a gun to my head or one of my children I can open it and they'll be satisfied with what is there and move along. They don't like to hang around after the deed. Buy 100,500,1000 oz'ers that can be painted with epoxy paint and can fit in any where (ie: door stops, indoor (or out) planter bases, etc. Use your imagination. Thanks for listening, Sliver
One word of caution about CEF. For US tax purposes, my recollection is that it is considerd a passive foreign investment company [PFIC] with special tax reporting requirements. Ask your tax preparer about it before doing anything.
Although this seems like a good idea, what happens when it's time to sell? Can you sell epoxy coated bars easily? And if not how do you remove it?
Howdy cloudsweeper, Good point - by all means do your homework. I've actually gone to their website where they talk about their tax status. Here's their prospectus: http://www.centralfund.com/prospectus/2006%20Prospectus/FINAL%20US%20PROSPECTUS%201%20DEC%2006.pdf In my case, I avoid the hassle and only own Tocqueville Gold TGLDX (pretty decent precious metals mutual fund) in my taxable account. All my other mutual funds, ETF's, individual mining stocks, etc., I own in tax deferred accounts. I'm very pain sensitive when it comes to the IRS and even using turbo tax, things can get crazy in a heartbeat. And that's my main point, be very careful with anything you own in a taxable form, be it stocks, funds, ETF's, closed end funds, or even raw bullion. The IRS says basically that any gain whatsoever you make on the sale of any kind of asset is taxable. Question: I know that if my heirs receive stocks from my estate, they get them at a stepped up cost basis. For example, if I bought Google at $100 and it's at $500 and I sell it, my Long Term cap gain is $400. However, if I die and will it to the kids, their cost basis is $500 so they could sell it the day after I die and not have any tax burden. Does this same stepped up cost basis apply to a coin collection? thanks, rono
Are you sure this is true? I have no experience in the matter but this seems totally contradictory to what I'd expect. I would assume your kids would be liable for the whole $500 price. I know there was some political fighting in the past about inheritance, and I guess I don't recall how it turned out. It just doesn't seem possible to me that someone can avoid getting taxed on something by dying.
Howdy, I am absolutely positive. Stocks (and according to satookoko all assets) that are part of an estate receive a stepped up cost basis for the heirs. This is why it is sometimes wise to hold your growth stocks until death if you've made a pile. Spend your other stuff, but let the kids get the growth stocks as your thereby avoid the cap gains tax. What you can do for more info is google 'stepped up cost basis' or go to the www.irs.gov site and search for the same thing. They've actually got a very nice website that's pretty user friendly. peace, rono
