Hi, I am a licensed dealer who has an opportunity to buy ~$3000 FV in 90% silver US coins. The seller wants to receive cash. Am I legally obligated to file a 1099-B if I pay cash, if I pay via check, or no matter how I pay? I'd really appreciate replies from those that truly know the answer and ideally can share a current website for reference. I've been to all the bullion-house sites which clearly say one is needed, but they do not deal in cash. Thank you in advance.
You already posted the answer to your own question in your post. Cash changes nothing for your obligations
It is not that simple I'm afraid. If I pay cash (hypothetically 3000x$16)=$48,000, then that would trigger me having to file an IRS 1099B to report the sale and would then trigger a Capital Gains reporting requirement for my seller. However, some sites say I can pay via a personal check and there are no 1099-B reporting or Capital Gains tax implications. I just don't know what is 100% accurate. I just found this too, but I wonder if anyone has already consulted their tax professional for a definitive answer from the IRS? "The International Council for Tangible Assets (ICTA) has published guidelines for which precious metals transactions must be reported to the IRS based on negotiations it had with the IRS. While ICTA believes they reflect the spirit of their discussions with the IRS, they are only guidelines, not a ruling, and are thus open to interpretation by the IRS and subject to change without notice. As you likely know things aren’t always black and white with the IRS, which is why it’s important to check with your tax professional."
The ICTA has a position in it so I would prefer a more neutral voice as I do not like to worry about the IRS! Jim https://www.investopedia.com/articl...ing-taxes-physical-goldsilver-investments.asp
Thanks. I am familiar with that site. The cited reference for the 1099-B sends readers to the JM Bullion site [https://www.jmbullion.com/investing-guide/taxes-reporting-iras/1099b-forms/) that says filing is required if 'A cash transaction greater than $10,000.' Their site also defines a cash transaction as: “Cash” is defined as any transaction payments of $10,000 or less that are made with traveler’s checks, cashier’s checks, money orders and bank drafts. Cash also refers to any purchases made with US or foreign currency. Personal checks, bank wires, credit/debit cards, PayPal and ACH transfers do not constitute as cash regardless of the payment amount. (https://www.jmbullion.com/reportable-bullion-transactions-infographic/) So my question remains , are we left to trust HUGE online bullion dealers with the fine print of what is legal for us small-time dealers?
Yes. You must send out the 1099 and the seller must show it on his tax return. You also need to get a receipt for proof of your cost basis for the future.
I'm not a dealer nor an accountant. If I was in your situation... Trade paper for metal and go on your way.
@coin0709 what you're describing would be the ideal way to launder money. Just trade your illicit dollars for bullion. The IRS wants their share of your profits no matter how you pay. Cash is no different than checks, CC, debit card, crypto currency or rabbits feet. Don't report your transaction and get jammed up if you're caught. Not to mention all your other transactions will be open for further scrutiny. The IRS code states that if you have profits selling illegal drugs on the street corner you need to report it and pay your taxes on it. We all know that's ludicrous yet it's written in the tax code. Don't think for a moment your scenario is a loophole because it's cash. On the contrary, it's scrutinized even moreso because it is cash.
Thank you. I bought the collection and paid via personal check (not considered “cash”) and according to the ICTA and JM BULLION no 1099-B need be filed. I hope. I called the IRS for advice and there was no way to get through for a real answer. Shocker.
