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STRATEGIC TAX SERVICES


Ways to Invest in Precious Metals

1031 Exchange Services - Precious Metals Exchange

Ways to Invest in Precious Metals

  1. Reporting Cash Transactions
    1. One or more related transactions with payments aggregating $10,000.00, when paid in currency, traveler’s checks, money orders, and/or bank originated checks.
    2. Suspicious Activity Report (SAR) FINCEN Form 109
    3. Anti-Money Laundering Regulations
  2. Ways to Invest in Precious Metals
    1. Bullion ingots or bars. May be identified by specific numbers
    2. Bullion coins. Nominally issued as legal tender, these coins' face value as currency is far below that of their value as bullion.
    3. Exchange traded funds: Undivided interests in pools of precious metals held by custodians
    4. Coins formerly used as currency, no longer circulated. (also known as Numismatic coins).
    5. Option to purchase in the future
  3. Are American Eagle bullion coins considered U.S. currency a.k.a. legal tender?
    1. No, Income Tax Treasury Regulations defines cash as the coin and currency of the United States or of any other country, which circulate in and are customarily used and accepted as money in the country in which issued. In Cordner versus U.S., the 9th Circuit stated that gold coins, while nominally considered legal tender, is not considered currency where such gold coin has an intrinsic fair market value in excess of its face amount.
    2. For example, distribution of 10 one ounce U.S. Gold Eagles as a dividend from a corporation to its shareholder would be reported at the spot price on the date of distribution and not based on the nominal $50 value per coin. In addition, a distribution from an IRA to its beneficiary of U.S. Gold Eagles is taxed at their fair market value at distribution.
    3. Foreign bullion coins as legal tender. Foreign currency is considered personal property and not as legal tender. The gain ( and presumably loss) resulting from the conversion of foreign currency back into US Currency is a capital gain. This is the case whether the currency circulates, such as the pound Sterling, or is no longer circulated, such as the British gold Sovereign.
 
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