|
|
|
Precious Metals Tax Swap
By Andy Schectman
A few years ago gold was in the low $250s, so the increase to today’s price near $435 (now up more than 70% in the past 52 months) certainly makes a gold bug happy. However, a lot of you may have previously purchased precious metals at higher than current market values. If so, did you know that you can take a tax loss and still keep your precious metals through what is called a precious metals tax swap? The IRS has a rule prohibiting a taxpayer from claiming a loss on the sale of an investment if that same investment was purchased within 30 days before or after the date of sale. The purpose of the rule is to discourage investors from selling at a loss just to get the tax benefit. This is commonly referred to as the 30-day Wash Rule. This rule however applies to securities and does not apply to precious metals (IRS CODE, SECTION 1091). Because precious metals do not apply to the Wash Rule, you can sell your metals and immediately repurchase the exact same merchandise for a 2-3 % fee with the benefit of a tax loss. In addition, there are no reporting requirements by the investor or the dealer when you repurchase your merchandise. In other words, you have just gained privacy through constructive reporting. Normal spreads and commissions make this sale and subsequent repurchase cost prohibitive. However, we offer a preferential commission of 2%, plus shipping, for bullion-related transactions and a 3% commission, plus shipping, for numismatics. Even if you don't need this tax-saving capital loss in the current tax year, you are permitted to use $3,000 per year and roll the remainder forward. The precious metals tax swap is an excellent strategy for those of you who hold precious metals or numismatics and want to save money on taxes.
|
|
