Convert Gold Bar to Gold Coins

Discussion in 'Bullion Investing' started by howboutatrade, Oct 2, 2007.

  1. howboutatrade

    howboutatrade Active Member

    I am looking to convert a gold bar to gold coins...this will then allow me to liquidate part of the investment and keep some as well.

    What is the best way to get this done to avoid the dreaded tax man coming after me?

    The gold bar is 32 oz....

    What type of premium should I expect converting to 1 oz bullion gold coins?

    Thanks for any advice.
     
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  3. Treashunt

    Treashunt The Other Frank

    First, welcome.
    Second, no ideas.
     
  4. hontonai

    hontonai Registered Contrarian

    Two unpleasant choices - make no profit and you owe no taxes, or cheat and don't report your profits.
    I think you have it backwards. Bullion bars are worth bullion prices. Some bullion coins have additional numismatic value, so you are not likely to receive more than 32 ounces of coins for your 32 ounce bar; and would probably incur expenses in making the exchange.
     
  5. rotobeast

    rotobeast Old Newbie

    You could check with local jewelers and coin dealers to see if they would trade you smaller bars for your large one.
    You may have to pay a small fee, but it could help you with your situation.
    :)
     
  6. USS656

    USS656 Here to Learn Supporter

    I believe each state is different as far as their tax rules. I think you will/may be required to pay either short or long term capital gains tax on the sale of any part of your gold investment. With gold coins minted as currency the rule may be a little different. I don't think you can take a large bar and make it into a group of small bars and then be exempt as a result. It may be easier to move at coin dealers but I would think that it will be costly either way.

    Good Luck
     
  7. elaine 1970

    elaine 1970 material girl

    convert gold bar to gold coin

    try microwaveoven.
     
  8. silvrluvr

    silvrluvr Senior Member

    I don't think anyone will accept a larger gold OR silver bar without having it assayed first, that co$ts money right off the bat....
     
  9. tcore

    tcore Coin Collector

    ha ha ha... that's funny! :thumb:
     
  10. howboutatrade

    howboutatrade Active Member

    Thank you for the early input. I did type incorrectly before....I know if I convert the 32 Oz bar to 1 Oz coins, I will not get 32 of them. I am curious if anyone could estimate the difference. 31 ounce coins for the bar would show me a premium I have to pay that is about $750..etc. etc.
     
  11. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    I'm not sure there is any point to coverting. I would guess [this is not tax advice] that you would owe the 28% federal tax on collectibles if you exchange it unless the coins you obtain are made from the bar itself. It's something to check with a tax accountant.
     
  12. JHar4330

    JHar4330 New Member

    go to kitco.com and check out the forums there, the people know their stuff as far as precious metals goes. They would definitely be able to help.
     
  13. USS656

    USS656 Here to Learn Supporter

    Thanks Jhar4330 - I was trying to think of where to send him to get the best advise and that has to be it! :thumb:
     
  14. GDJMSP

    GDJMSP Numismatist Moderator

    Easy answer to this - take it to the US Mint. They will give you AGE coins for the bar once they have assayed it. They will also deduct for all expenses.

    But since you are not selling anything to anyone, you are exchanging for like goods, there are no capital gains. In fact you will incur a loss for the expenses.

    But if you sell the coins, then you may have to worry about taxes, but not until then.
     
  15. huntsman53

    huntsman53 Supporter**


    Gold Bullion Bars just like some Silver bars have a Collector's value which is above and beyond the value of the Gold or Silver that they contain! With this knowledge in mind, you can take the Bar to a Coin Show and should be able to trade it to a Coin Dealer for an equal value Gold-wise (32 oz. X current Gold price) in cash and 1 oz. American Gold Eagles. In this manner, you should not suffer any loss in the exchange, not have to pay any taxes and you will be able to receive the amount of Gold coins that you want to keep for the future.


    Frank
     
  16. Car10

    Car10 Senior Member

    This solution might work...but then again, at the current time the US Mint is not selling any Gold Eagles(proof or burnished uncirculateds) to the public. They have temporarily suspended sales because of the volitility in the price of gold.
     
  17. Conder101

    Conder101 Numismatist

    I think you will also find that the IRS would not consider gold bars for gold coins to be a like kind exchange either.
     
  18. GDJMSP

    GDJMSP Numismatist Moderator

    Perhaps, ya never know with the IRS. But the mint would. And that might present an interesting quandary - having one govt. agency saying it is and another saying it isn't.
     
  19. Conder101

    Conder101 Numismatist

    Wouldn't faze the government at all. I've known than since I once attended an IRS tax sale where they were selling counterfeit bust dollars as genuine, including a reeded edge 1804 that they were representing as one of the restrikes listed in the Redbook (Yes they made specific reference to the redbook listing). And they continued to do so even after it was brought to their attention that they were fakes and not legal to own.

    The IRS one arm of the Treasury Dept, fraudulently selling items liable for confiscation by the Secret Service, another arm of the Treasury Dept.

    I also doubt you would get any gold eagles from the mint for your gold bar. I don't know if the government still buys gold that way (and if they did you might only get the official government price of $41.25 per oz.). The mint doesn't sell the unc to the public so you probably could get those. I believe about the only thing the mint could do with your gold deposit would be to assay it and return it to you in the form of gold bars with a government assay stamp.
     
  20. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    That would be my concern also. The like-kind rule applies only to business and investment property, and the IRS gets to determine what qualifies. The gold bars held by the GLD ETF have been determined by the IRS to be "collectibles" so who knows what they would say. If something doesn't qualify for the 15% capital gains treatment, it might also not qualify for a like-kind exchange in the eyes of the IRS. Professional tax advice is required here.
     
  21. Conder101

    Conder101 Numismatist

    And "collectibles" do not qualify for the 15% capital gains treatment. They are taxed at 28%.
     
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