Paying cap gains on silver

[cubical]

If one was going to pay taxes on capital gains on silver(or any collectible for that matter), but he did not have a receipt of purchase price(or cost basis), could he give a best guess estimate to the IRS or do they require a receipt to justify the cost basis. If the latter... if no receipt can be produced must the cost basis be 0? Even though innocent until proven guilty no longer exists in many cases, it would seem that unless the IRA can prove your costs basis is different than you claim, they can not alter it.

I ask this because I have bought coins from coin shops over the years and have no receipts. I have no plan on selling anytime soon, if ever, but I am curious incase I have to.

 

[Petar]

I actually found a precious metals dealer who was able to find the loopholes to incorporate and become a chartered bank.

The significance of this is that he is able to exchange precious metals as monetary instruments TAX FREE.

 

[angelatc]

My coin dealer always gave me handwritten receipts. If I were you, I'd buy a receipt pad, make up some numbers, fold them up and carry them in your wallet for a couple of weeks, then throw them in the safe or whatever with your coins. When the price goes up, throw those out and create some new ones.

Or work a deal with your buddy - get him to list them on eBay at a high price, then you buy them really quick. Print the page out, and voila - instant receipt. In 5 0r 10 years you won't be able to fake these...it will probably all be digital. But at this juncture, it's still a bitch for them to disprove a piece of paper written from a store that's been out of business for umpteen years.

Personally though - I'd try to plan on doing business with people who would take gold as payment.

 

[rpwi]

Personally though - I'd try to plan on doing business with people who would take gold as payment.

Then you have to pay barter income tax...which is even more complicated and irritating than capital gains.

 

[angelatc]

Then you have to pay barter income tax...which is even more complicated and irritating than capital gains.

Only if you report it.

 

[rpwi]

Only if you report it.

LOL...well that is one way to approach the issue. Perhaps if you do this in small amounts and are audited you claim it applied to your gift tax exemption?? Who knows... For somebody who wants to play by the rules and use non-dollars as currency...tracking the fair-market value of your non-dollars for EVERY transaction would be a serious downer.

 

[Dr.3D]

Can't you just trade your silver to somebody for currency?

 

[LibertyEagle]

Didn't they pass a law that requires us to pay tax as if it is ordinary income when we sell PMs?

 

[angelatc]

Didn't they pass a law that requires us to pay tax as if it is ordinary income when we sell PMs?

Not ordinary income, capital gains.

Don't take tax advice off the internet! Liberty Eagle is right!

 

[Petar]

Can't you just trade your silver to somebody for currency?

This is basically what I am trying to convey, although it is happening in Canada.

I found a precious metals dealer who was able to become a chartered bank, so he trades PMs as monetary instruments.

The Canadian government does not charge him any taxes because they are monetary instruments.

He was only able to find the loopholes because he'd found a retiring tax agent who was willing to give him the scoop.

He stays away from the numesmatic aspect and is able to operate between the cracks this way.

 

[jclay2]

Cmon people. Its called buying with cash. How will they know you have any assets if there is no record of a pm transaction.

 

[Carson]

I sort of figure on average nobody makes any capital gains. The silver is still silver and trades amongst the other commodities flat.

Even though we've been conditioned to think we've really made a killing in the stock market it could be we are under the spell of an optical illusion.

See the little bumps during earlier times of war when we introduced fake money into the money supply? If you double the supply it then takes twice as many.

Now compare the first chart with this chart of the Dow Jones Industrial Average. If your not seeing what I'm talking about imagine that the Dow Jone average is an average of say one hundred stocks. If you knock off two zero's off of the Dow chart you will see that it matches the devaluation of the dollar.

To understand how the price of commodities has worked and been part of a stealth stable market look at what a real dollar can still do. It has been there doing it all these years. Still running 20 cents a gallon.

Sure we need to pay our capital gains when we make them. Careful though. Maybe these are the false profits we were warned about?

The more they inflate the more of a share of your stuff they cut themselves in on.

 

[Carson]

There are some odd rules on capital gains of precious metals. I can't remember all of the details. Maybe someone else does here.

Also something about capital gains on art.

Then again I've seen coins that are art to me so things really get confusing.


I found this with the Googler:

Capital Gains and Losses

When you sell silver bullion, the IRS taxes you on the amount of money you make from the sale. To calculate a capital gain, you subtract the original amount you paid for the bullion from the total amount for which you sold it. A positive amount results in a capital gain, and a negative amount results in a capital loss. If you inherited the silver bullion, you use the fair market value of the metal and subtract that from the total amount for which you sold it.
Short-Term Capital Gains

Short-term capital gains taxes apply if you bought and held your silver bullion for less than one year. For example, if you buy silver bullion in January and sell it in August, the holding period is eight months. You then have to pay short-term capital gains taxes on any proceeds you make from the sale. The short-term capital gains taxes for silver bullion is your regular income tax rate. Regular income tax rates range from 0 to 35 percent.
Long-Term Capital Gains

Long-term capital gains taxes apply if you bought and held your silver bullion for more than one year. If your regular income tax bracket is 28, 33 or 35 percent, your capital gains tax rate for the sale of silver bullion is 28 percent. If your regular income tax bracket is 0, 10, 15 or 25 percent, the long-term capital gains tax rate is the same as your regular income tax rate. The 28 percent capital gains tax rate does not apply to those in lower income tax brackets.


Read more: Income Tax Consequences of Selling Silver Bullion | eHow.com http://www.ehow.com/list_7454178_income-consequences-selling-silver-bullion.html#ixzz20fV5XYhP

Or something that reads sort of hard and dirty like it was pulled out of the horses...

http://www.irs.gov/taxtopics/tc409.html

 

[oyarde]

My coin dealer buys from me in cash , I buy from him in cash , he does write out a handwritten receipt for me ,it does not have my name on it . I pay no tax , he pays that . So , I buy something from him , I pay the ask , he buys from me , he pays me the bid and he eats the tax. He is an expert coin grader , much better than any of the services . I have zero complaints and there is zero record of any transactions .

 

[idiom]

Capital gains tax? rofl. Yeah you guys are soooo free.

 

[Carson]

Capital gains tax? rofl. Yeah you guys are soooo free.

Don't underestimate the freedom of piece of mind. You can't put a dollar value on it.

You kind of learn early on that if you do something like swipe someones stuff it is never worth the gain for the grief it brings.


Or can you?

 

[idiom]

Don't underestimate the freedom of piece of mind. You can't put a dollar value on it.

You kind of learn early on that if you do something like swipe someones stuff it is never worth the gain for the grief it brings.


Or can you?

By 'Guys' I meant Americans... There are a lot of Western countries with no capital gains tax.

 

[Dr.3D]

By 'Guys' I meant Americans... There are a lot of Western countries with no capital gains tax.

Well, come on now... the government can't have people opting out of being robbed by inflation can they? No matter what you do to avoid the inflation tax, they seem to have all the bases covered.

 

[Carson]

Don't underestimate the freedom of piece of mind. You can't put a dollar value on it.

You kind of learn early on that if you do something like swipe someones stuff it is never worth the gain for the grief it brings.


Or can you?

By 'Guys' I meant Americans... There are a lot of Western countries with no capital gains tax.

By, "Or can you?" I was looking at my own post and it seemed I went around in circles and tried to.


I'm with Dr.3D, and his post of

"Well, come on now... the government can't have people opting out of being robbed by inflation can they? No matter what you do to avoid the inflation tax, they seem to have all the bases covered. "

I sort of assumed they had squelched out any way to save for the future globally. Thanks for the ray of hope idiom.

 

[DEGuy]

Then you have to pay barter income tax...which is even more complicated and irritating than capital gains.

Although, if the side paying silver or gold is using american silver eagles and gold eagles for the face value, it isn't technically a barter transaction. Of course, I wouldn't want to be the one fight the IRS in court over that legal loophole. Eventually it'll be directly addressed in ederal court, and it'll be interesting to see what happens then.