Numismatic tax benefit

Discussion in 'Coin Chat' started by calebmurphy, Nov 8, 2018.

  1. calebmurphy

    calebmurphy New Member

    Aight, I'm a newbie here and newbie to coins. Just transferred an old 401K into silver coins thru one of the big companies. The rep I talked to mentioned that numismatic coins are "nondisclosable" to the IRS? Whereas bullion is not. I'm looking for the guide to idiot guide explanation for this. Does this mean that if i buy 10k worth of coins and sell it for 20k in 10 years I dont have to report or pay capital gains or anything else on the profit? If I pass 100 coins to my kids do they have to report it or pay capital gains when they sell them? I'm not trying to break the law but if there is any tax benefit to be had I'd like to take it. Been searching for days and got some info but I need an idiot guide break down on this. Thanks.
     
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  3. rickmp

    rickmp Frequently flatulent.

    Legally, all capital gains are to be reported to the IRS when you file your tax return, whether previously reported by the buyer.
    I don't believe that very many of those gains actually make it onto tax returns.
     
    Two Dogs likes this.
  4. GDJMSP

    GDJMSP Numismatist Moderator

    In simple terms, what he's telling you is that bullion meets the qualifications for an IRA account and numismatic silver coins, or gold numismatic coins, do not. That said you must also understand that ASEs and the like are not numismatic coins - they are classified as bullion.

    So, any buying and subsequent selling of numismatic coins must be reported to the IRS every year when you file your taxes. And taxes on gains must be paid that year. But they can also be offset by looses.

    Bottom line, numismatic coins are treated just like anything else when it comes to taxes. There are no exemptions or exceptions on them.
     
  5. SchwaVB57

    SchwaVB57 Well-Known Member

    As long as I sell less than 699.00 at a time, my LCS does not report to the IRS. $700.00 they report a 1099 form, I believe it is. This is why I buy mostly 10TH or 1/4 ounce gold eagles.
     
    LA_Geezer likes this.
  6. GDJMSP

    GDJMSP Numismatist Moderator

    Whether they report it or not doesn't matter. You are still required, by law, to report it yourself.
     
  7. Randy Abercrombie

    Randy Abercrombie Supporter! Supporter

    Well..... I'll put it like this. I keep quite a bit of PM's in several safe deposit boxes and a small amount in my home safe. I also have a thing for collectible guitars and ran across a deal I couldn't pass up four years ago. I simply carried four rolls of ASE's (American Silver Eagles) from my safe down to my dealer. He peeled off fourteen one hundred dollar bills.... No fuss... No muss.... No reporting..... I went and purchased my guitar. Now, today that would be closer to $1100.00.

    Thing is about precious metals.... It is such a gamble. I say its a good place to store wealth but never a good place to create wealth. And for me it isn't an investment vehicle. My heirs will get the bulk of my PM hoarding. I just like the stuff.
     
    LA_Geezer likes this.
  8. Clawcoins

    Clawcoins Well-Known Member

    You have several questions there. I recommend that you Talk to a Tax Advisor / Accountant /Estate type person?

    Not sure the place you did this transfer is ... well ... telling the whole truth. But I'm not going to speculate as we don't know where you live, etc.
    Do you have a link to the company's website ?

    but these are IRS reportable items for form 1099B for the dealer, but if less you just put it in your tax return.
    https://www.apmex.com/faq/tax-information-on-gold-silver-buying#what-items-are-irs-reportable-items
    upload_2018-11-8_14-40-4.png

    have you spoken to the IRS about this stuff ... let's just say it's not really very favorable.
     
  9. SchwaVB57

    SchwaVB57 Well-Known Member

    People are supposed to obey speed limit laws as well.
     
  10. calebmurphy

    calebmurphy New Member

    Good info so far! Like a said I'm a newbie at this. The way the rep said it made it sound like government wording straight from CFR or the IRS. "Nondisclosable". Like hey... I can't legally tell you anything but that, but it's an obvious advantage to stocks bonds or other. I'm just trying to figure out what it means.

    I went thru Lear capital. It was an old 401k just sitting and I saw the TV commercial. Now I got a few hundred 1.5 oz silver snowy owls held in a vault that I can't get till I'm 59. May hate myself for it, might be a millionaire tomorrow but it is what it is.

    Let me ask this. From the above list posted by clawcoins, if I buy 2 kilos of gold bars and hold them am I required to report that I have them? The price I paid for them? Or anything? What's the difference if I bought 1 ounce of gold bar and 2 kilos of gold bar according to that list?
     
    Last edited: Nov 8, 2018
  11. Clawcoins

    Clawcoins Well-Known Member

    Capital Gains is how much profit (or loss) you got of when you Sold your asset to when you Bought your asset minus direct expenses.

    So by holding/storing physical items, you'll be able to deduct the monthly/annual costs of storage, fees for handling, heavy buy/sell commissions, etc etc from any potential profit you may receive down the road.

    Tax laws have changed and I don't know them in detail for this coming tax season and even then so, don't know the tax laws / retirement acct laws for PM based items.
     
    Last edited: Nov 8, 2018
  12. GDJMSP

    GDJMSP Numismatist Moderator

    Like the man said Cale - talk to an accountant. And if ya don't have one, I'd be getting one if I were you.
     
  13. calebmurphy

    calebmurphy New Member

    I will be talking to my accountant I'm just doing my online research so I don't go in blind.
     
  14. Clawcoins

    Clawcoins Well-Known Member

    You already went in head over heals blind ...

    old article
    https://coinweek.com/bullion-report...etals-depends-on-the-type-length-of-holdings/

    good article about the entire thing, though old tax rates are identified
    https://www.marketwatch.com/story/the-tax-implications-of-owning-gold-2015-07-15

    https://www.forbes.com/sites/greats...n-ira-creates-possession-issues/#176c53542101


    IRS
    https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-investments

    https://www.irs.gov/pub/irs-pdf/p590a.pdf
    upload_2018-11-8_15-24-58.png
     
    Robert91791 likes this.
  15. Burton Strauss III

    Burton Strauss III Supporter! Supporter

    You better talk to a Tax Adviser like RIGHT NOW.

    What you did was withdraw money from a 401(k) and unless you are of age, you've triggered a taxable withdrawal + penalty.

    https://www.irs.gov/newsroom/early-withdrawals-from-retirement-plans
     
    LA_Geezer likes this.
  16. LakeEffect

    LakeEffect Average Circulated

    If you closed your 401(k) and bought silver with the money, Burton Strauss III is right - you owe taxes and a penalty right now.

    If you rolled the 401(k) over into an IRA then you will be taxed when you withdraw the money later in life. It will be taxed as ordinary income, like a paycheck, as all IRA withdrawals are.
     
    Last edited: Nov 8, 2018
    Trish Godfrey likes this.
  17. Clawcoins

    Clawcoins Well-Known Member

    by the time you retire IRAs are designed to assume you will be in a lower tax bracket by then, thus will pay less taxes on the capital gains which totally depend upon the tax laws in the future.

    Generally you may want to research the "good" and the "bad" of any type of investment before making the transaction.

    Here's a good article from Forbes that goes over the good and bad along with options.
    https://www.forbes.com/sites/nextav...re-opening-a-gold-or-silver-ira/#2737243076b8

    FYI

    here's some more info to think of
    • Lear has a $160 annual fee for online access, financial statements, "storage of coins" and other stuff.
    • Although they also have an annual charge for "storage fees" ... contrary to the "storage of coins" which may be around $100-150.
    • and of course they have commissions on transactions.
    • and they do not guarantee that they will buy back any coins at time of redemption. And if they do, it will be at their market valuation.
    • they generally can add fees up to 29%
    They currently store stuff at at Brinks depository in Salt Lake City.

    NOTE: they may have rolled their older $100 Admin fee and $150 storage fee into the single $160 annual fee. Consult your contract.
     
    Last edited: Nov 8, 2018
  18. Burton Strauss III

    Burton Strauss III Supporter! Supporter

    OP said coins, twice, not bullion. As was posted earlier the qualifications for bullion are pretty strict.
     
  19. LakeEffect

    LakeEffect Average Circulated

    OP stated Snowy Owls. He also stated the account was with Lear, who famously offer "Precious Metal IRA's".

    The IRS mandates what is allowed and what isn't allowed in a precious metals IRA*. So I assume the OP has opened a Precious Metal IRA with Lear, and his withdrawals will be taxed as ordinary income, as all conventional IRA's are, regardless of what is held in them.

    *Here's a list.
     
  20. Burton Strauss III

    Burton Strauss III Supporter! Supporter

    Do you know what we call people who use WikiPedia as tax reference materials? The defendant....


    IRS Pub 590-A:

    https://www.irs.gov/publications/p590a

    Also see IRC 408(m), here https://www.law.cornell.edu/uscode/text/26/408
     
  21. physics-fan3.14

    physics-fan3.14 You got any more of them.... prooflikes?

    I highly suggest that YOU DON'T TAKE ANY TAX OR LEGAL ADVICE FROM STRANGERS ON THE INTERNET.

    SPEAK TO A CERTIFIED TAX ACCOUNTANT OR ATTORNEY, AND GET CREDIBLE LEGAL ADVICE.

    These laws also vary state-to-state, so while some here may understand the federal law, you need clear guidance for your individual, particular situation.
     
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