Cashing out your bullion when its time, tax question ?

I have heard a couple of different things about this, your taxed on any amount
Of a certain dollar amount cashed in but that varies by state, just would like
a little tax education when the times come.

 

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My guess is you are taxed on your profit when you sell, just like normal income. I could be wrong though

 

Legally, yes. Many don't actually report their profit to the IRS, though.

 

do you know if there is a limit on not being taxed or a ceiling ?

 

Not sure, sorry.

 

I think the shop that is buying has to report money going out correct ?
If that,s the case and the amount is substantial you would have no choice
Then to report the earnings, are you might get a visit from guys in a black
Sedan and a double breasted suit..LOL

 

I think buying and selling PMs falls under the capital gains tax. Profit garnered on an investment held less than a year is taxed at the ordinary income tax rate. Held for more than a year is taxed at the capital gains rate, which is often lower than the income tax rate.

The rates seem to change every year so a good CPA is a big help.

 

I believe any transaction near or above ten thousand dollars must be reported by the financial institution who processes the check for payment when you sell. (but don't quote me on this, cause I am probably wrong). So if you sell bullion and receive a check the smart thing to do is report it to the IRS. It is a good idea to keep good records because the cost of the bullion, storage fees and commission would be deducted from the sale price in determining the gain or profit.

 

Yeah thats what i was looking for but i will double check with my tax guy, thanks
for the info

 

Tell me about it ...LOL

 

Not reporting is just plain dumb. And it doesn't take much. I inadvertantly failed to put down a $200 stock dividend payment on my return years ago. Naturally, the company reported it to the Treasury Department.

As a result, your humble narrator had some 'splaining to do to the IRS, plus paying a penalty and interest. Not fun.

 

Good rule of thumb that,s sounded like a very expensive lesson

 

As far as I know it only applies to a total of $10K per year. If you spread your sales around then no one will need to report.

I thought it was taxes under the collectibles rate, which is not the same as capital gains. I thought it was 28% regardless. But I am not a tax expert and certainly don't keep up with the changes.

 

All income, no matter it's source, is legally required to be reported.
It makes no difference whether or not a 1099 is issued.
The dollar amount makes no difference.
IRS rules require all income to be reported.
Anyone that tells you different is wrong.
The best thing that you can do is consult a CPA and/or the IRS.
I'm not a CPA or an IRS agent, but I have been employed as a tax preparer for many years.
When you come to this, or any other, forum on the web to ask tax questions, you get what you pay for.
If you rely on those answers to file your tax returns, expect that audit letter from the IRS.

 

Hmm. I'm obviously not an expert either. Maybe someone with accounting expertise will check in.

 

@sakata

The JMBullion site says they are considered capital assets and, as collectibles, are subject to up to a 28 percent tax rate. The tax is imposed on the profit when the asset is sold.

 

And isn't any willful failure to disclose ANY income prosecutable as criminal tax fraud?

 

Yes.

 

It used to be $9,999.99 and dropped to $4,999.99 after 9/11. At this point you must fill out a special form at your banking institution and is reported to the Feds. It was part of the Patriot Act.

 

Please do not call it the Patriot act. It is the USAPATRIOT act. The acronym makes a big difference!

"Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism". Note the word terrorism, not sellers of PMs.