Numismatic tax benefit

Once you have anything in an IRA the good ole IRS knows every one of your moves, as long as you don't cash out before a certain age you can avoid all kinds of penalties. I think if you sell stuff in your personal safe to the right dealer for cash you may get away with taxes, but there is a limit like 999 ounces . IRS always changes rules so you have do research on this topic each year to be certain.

 

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You are 100% correct.

 

@calebmurphy This probably wasn't the reception you were expecting from a Bullion/Coin website, right? We've all already talked up and down about it. many "investment people" that have some profit to be made from any investment will recommend what you like.

It is hard to find an investment person who won't recommend most things as they really need to know your long term objective and such. I can't really diss PMs as an "investment" depending upon how you invested it as most platforms create high annual fees and such that make them into losses unless by chance a situation like in 2011 occurs when *you* have the chance to convert.

I have PMs as an "investment". But not in an IRA. So this gives me full control. They also are in a Bank so I have access at any time, and I store other stuff in the big box so I don't really mentally count the "annual storage fees" so it's just acquisition cost (except maybe for tax time). So if the market pops like in 2011 then I can move on it right then.

Many investment professionals are not very knowledgeable about PM IRAs and such. on the flipside, the companies that make the "idiots guides" for what you want, are the very companies that sell these IRAs and such.

As any investment I always tell people to not search for the "positive" aspects of it, but search for the "negative" aspects of it. People's behavior will be to look for positive results to further support their desires; which always is a slippery downward slope instead of what they think is an upwards slope. This is not just PM stuff, but even certain Investment Agencies that loose customer monies based upon their investment strategies. I'm sure you've seen the ads on TV too of some in particular.

Read the links I gave previously.
And continue to research this .. search for "bad things about silver IRAs", you have to bypass the "ads" you'll get in a search result. You also have to ignore the articles of companies that provide these type of investments. Look for results of investment magazines or the like that do not sell these products.

I already gave some links to Forbes.com but here's another non-magazine result
https://investorjunkie.com/34727/gold-ira-dumb-idea/

 

Interesting stuff, great education.

But this could happen with any rollover. I don't see how this would be my problem if I never took a penny out of it and in the documentation I signed it states that its an eligible IRA account. I had two feasible options, roll this old 401k into my current 401k or diversify it into something else. I remember what happened to this 401k in 2008, and sure I saw it come back with time, but what if I had been in metals at that time, I wouldn't be looking at 15-25% increase on my best years but possibly easily a 100% increase, possibly 200-300% based on the values of silver back then. I dont know what it takes to sell it or if anybody will buy when it gets that high. Lear Capital has ensured me that it will be done. Do I trust them completely? NO! Do I trust them as much as the untouchable 401K where it was at or my current 401K? Probably. I trust them more than my electric department.

I've traded currencies, commodities and stocks in post tax accounts. I'm familiar with gold and silver in that aspect, but it was all a paper/computer process. The idea was that, buy gold or silver at the market price with the old 401K money so if the economy tanks and my current 401k starts sucking it up, the metals will hopefully increase. Even if they dont increase and decrease, I'm pretty sure that everybody here would say that unless there's a total collapse it'll never be worth nothing. In the case of total collapse I am as prepared as I can be right now. I will be very wealthy at that point and not be worried about your gold or my silver or any 401k I've ever had.

What I'm questioning is, what is the difference between buying 3500 ounces of silver bullion for $50k and buying 3000 nondisclosable 1 ounce coins with a semi numismatic or numismatic value? Because one of the positives about buying less silver for more money was that it was nondisclosable whereas the bullion prices were basically at that market price of 14.75. The coins were almost double that. I understand why they are more, each 1 ounce coin is crafted, minted, and collectible due to its rarity and a bunch of other factors. But if I am to buy a 500 ounce bar of silver, it is somehow disclosable. Why?

If the price of silver is $15 an ounce, I know exactly how to sell your extremely rare $1 silver piece that's worth a million dollars for $14 or whatever the buy price is at the time. Go down to any local pawn shop that buys gold and silver and sell it to them or trade for $20 an ounce. I've done that. If you show up with it there gonna buy it for what its worth minus some for the buy/sell price. So what I'm wondering really beyond the 401k that may or may not have been the best idea is: If I set aside $100 a month to buy these seminumismatic coins that are near the price per ounce of bullion silver, would that not be a wise investment? We know it wont tank like plenty of stocks I've invested in... And its almost a guarantee that it will go up in value if the dollar goes down in value... I buy 5 1oz silver buffalos a month (post tax) for 2 years and end up with 120x1oz coins. Then a market correction, crash, whatever that doesnt leave us in an ice age, but my current 401k dips to 60% of it's original value. Silver jumps up to 30 an oz. And that's historical. It happened. Then what's to keep me from taking 120 silver coins in to the pawn shop on the corner and selling them for $3500ish depending on what they buy at, when I paid on average $1800 for it? And what is the difference if I had bought 1x120oz bar of silver bullion and sold it in this same scenario? Because we know the 120oz bar is "disclosable" or "reportable" and the silver buffalos are not. Again, I'm not trying to cheat, I'm trying to understand.

 

There is no such thing as a nondisclosable IRA... take a look at box 5 of form 5498...

Anyway, you're sure you are right, the rest of us have seen enough red flags to not follow in your footsteps.

Good luck... I'm out...

 

When I said it's like cash, I meant as far as reporting or disclosing goes, not necessarily how you spend it. If I buy 1,000 of those silver eagles, I dont have to report what I bought it for, and when I take possession of them, I dont have to report that I own 1,000 silver eagles worth $15,000. I'm just holding some coins. I guess, literally, I'm holding $1,000 worth of coins...? And I can now go down to the local pawn shop and sell them for their weight in silver at minimum and likewise not report it? That's where I need coinstalk help. If you take a single coin to a coin dealer and sell it, say its a 1oz silver coin and you sell for $1000. Is there any paperwork that is filed with the IRS? Would there be paperwork if it was an $8000 disclosable/reportable bar of silver? I understand you should claim capital gains, but if I give these to my kids and they sell them in 50 years when I'm dead and gone, they wont know what I paid for them. They'll only know they have some coins that are worth $x. So how can they pay capital gains? Also, if they are nondisclosable vs disclosable, and I give them to my kids do they have to disclose that they inherited the disclosable bullion and pay inheritance tax? Do they not with nondisclosable numismatic coins?

 

I definitely understand and thats part of why I'm asking. I cant see any IRA especially this one as nondisclosable because I took that tax free money and invested it somewhere else. But when I turn 59.5 or whatever age and I get those coins what then? Maybe its just considered a cash IRA if the silver I bought is nondisclosable? Why would a rep mention it and not be able to talk about because they cant give tax advice it if it wasnt significant? They used it as a way to tell me to buy seminumnismatic coins at $30oz vs silver buillion at $14oz. Why?

 

But you can make changes in your IRA that make you a ton of money or lose you a ton of money. As long as you dont withdraw money you wont pay taxes or be able to claim a loss on it. As far as the moves you make inside your IRA I'm not sure. I think it's basically public record and disclosable/reportable what stocks you've held and your gains and losses. I'm just trying to figure out if numismatic coins are also. It is possible that you could transfer your 401k to an eligible metals custodian and buy 1x1oz coin with a numismatic value of $50k with all your money as an investment. I'd say not smart at all, but possible. Now is it reportable if you sell it next year for $60k? You wont pay taxes at that point unless you cash out something because it's inside your IRA, just like the stocks you sold when you transferred your 401k. So really regardless whether it's reportable inside the IRA or not, it really boils down to what you do when you cash it out. If I had done this in the 50's when silver was say $1oz. I got 50k 1oz coins in 1960 and now I'm 59.5 and tell them to send me my 50k silver coins. If it was nondisclosable what kind of taxes am I going to pay? Surely they cant say they are going to base it off of the current market value of silver?

 

Those companies have many lawyers and previous cases to base the prospectus they write for their investment offerings, and you know who they will favor. It is a huge pain in the joints to have to read them, but absolutely do so, as they are used to get away with as many 'quirks' they know about and few others do. Bullion people really are suspicious of J. P. Morgan, such as putting into the prospectus that if they do not have enough of your silver in storage to deliver it, they can deliver in cash, and it is perfectly legal since they state it in the paper. They do have it in the correct font and size that a person would never win. Look for something like that in the paperwork in case things go bad.

 

What dealer is going to buy $15,000 of silver eagles?

 

Your coin collection is not reportable to the IRS until you sell it. That does not preclude you from declaring a value and paying taxes on the capital gains each year if you think you are in a lower tax bracket now than you will be in when you eventually sell. I don't know many people who fall into that category, myself.

When you sell your coins you are legally obligated to report the capital gains. The IRS would want you to report the entire $20,000, but I think if you have good records of purchase prices and an accountant who knows what he's doing, you could get by with reporting only the $10,000 gains. That's not legal advice, so please don't try to hold me responsible if you end up in jail, though.

 

You're thinking the wrong way. But it seems you have the concept right in a way.

If you withdraw at 59-1/2 or 70-1/2 from an IRA you *are* taking an IRA withdraw (whether RMD or more). It just so happens that it's in coins not cash. Based on the basis cost you'll pay tax (or not) at the time of withdrawal ... and put on your taxes.

you will then have a handful of coins. You'll then *could* convert those coins to cash, which is after-the-fact of taking the 401k distribution.

Yes, at that point it's beyond reach of the gov't .. to answer your question.

Any transactions at pawn shops, coin shops, etc over $10k are reported but for other reasons.

The IRA company tracks the IRA basis to determine the taxation for eventual IRA withdrawals. If basis is not taken into account, tax-free withdrawals can become taxable, meaning the funds will be taxed twice.

So I think one of your questions is now that you have the coins and already paid your taxes on it. If you go to sell $15k at someplace (and valuation hasn't changed), do you file it on your taxes?? probably better safe than sorry as you'll have the basis and sale price to report.

Consult a very knowledgeable tax/retirement accountant. They'll know more .. I'm not a tax accountant but I read a book once, but it wasn't about retirement Precious Metals tax accounting.

 

The tax basis for their capital gains would be the value they had at the time they were given them. If they don't know what they were worth (i'm assuming we are talking about bullion coins) they would most likely use the average spot price for the year they received them. Worst case is they would use the face value of the coins.

Most likely they would not send you 50K 1 oz coins, the IRA trustee would convert them to cash and send you a check and it would be treated as a $750,000 disbursement and taxed at your current tax rate. (As a disbursement it would be treated as income and not capital gains.)

 

I thought the threshold was $600

As in CI?