At Miles Franklin, one of the biggest questions we receive regards the taxation and reporting requirements of Precious Metal transactions. We do not dispatch tax advice, but are aware of related reporting requirements, many of which are quite liberal. In our most recent Webinar – the April 25th “Precious Metals Q&A Rap Session” – Miles Franklin’s President, Andy Schectman, discusses such requirements in detail, starting in the first minute.
Precious Metals Q&A Rap Session
Irrespective, I am extremely excited about the prospect of U.S. States accepting government-minted bullion coins as “legal tender,” empowering them to pay off debts or barter private transactions. Last year, Utah became the first state to make this LAW, yielding potentially VERY lucrative reasons – aside from the countless others I discuss – to purchase PHYSICAL gold and silver Eagles.
Utah now Accepts Gold and Silver – Andy Waldock
Per the article above, describing what is now LAW in Utah:
The bill provides for transactions based on the weight of the metals to determine their value, rather than face value. This allows the use of gold and silver bullion to be used as payment, rather than the limited scope of federally minted precious metal coinage.
In other words, you could conduct private transactions based on coins’ MARKET VALUE, not their FACE VALUE. Next:
Utah House Bill 157 will now treat precious metal transactions just like currency exchanges. In other words, if you ask for change for a $100, you’ll get the entire $100 back. You’ll be able to cash in your precious metal holdings for fair market prices or, simply use precious metals to make purchases, payments or deposits. The law states that metals don’t have to be accepted but, if they are, it will be by weight of the metal and the market price for it.
Yes, $100 worth of coins can be exchanged for $100, which if I read this correctly, infers NO CAPITAL GAINS TAXES on previous purchases of U.S. gold and silver Eagles – and possibly gold Buffaloes, also minted by the U.S. government. Again, Miles Franklin does not give tax advice of any kind. However, the below statement renders that point moot, suggesting the ability to exchange your coins to the Utah state government for cash, free of taxes.
Finally, the kicker, as I’ve read it, is Utah will offer a one-time tax credit to offset capital gains on any metal that is being exchanged for paper. The capital gains and tax reporting nature of getting out of your holdings will work like a currency exchange. This eliminates the physical black market or, shadow market of physical transactions. This will avoid multiple calls while shopping transaction values and eliminate the tricky conversation of tax reporting issues.
In fact, the only comment I’d debate is the writer’s disrespect of Utah, in my experience one of the best managed States in the Union! Don’t think they don’t understand the value of citizens paying them taxes in gold and silver bullion, as well as exchanging such coins for WORTHLESS fiat dollars.
Who’d have thought that seldom mentioned Utah would be the pioneer of such forward thinking?
Aside from Utah, five other States have submitted similar bills for legislation, including South Carolina – likely the second State to pass such a LAW – Tennessee, Iowa, and Miles Franklin’s home state of Minnesota. If Minnesota does create such a LAW, it will increase our firm’s flexibility in transacting with clients, heightening the advantage of doing business with us.
States To Use Gold and Silver as Legal Tender
Mind you, the reason this topic has come into play is the fear of Federal Reserve generated HYPERINFLATION. Thus, if such laws do pass en masse, it likely will due to massive social, political, and economic upheaval, the type that would make the nation a far more dangerous place. That said, all we can do is take steps to PROTECT OURSELVES, and one such step is to be aware of potentially favorable legislation – and legal jurisdictions – as we head toward the END GAME of the U.S. dollar.
Andy,
You raised the question about showing a drivers liscence when you buy gold or silver at a coin shop. I am in Florida and anytime I buy gold or silver from my local coin shop in the amount of over $3,000 I have to show it. The dealer tells me it is just for in house use, what ever that means.
Chuck
Chuck,
Yeah right, “for in house use.”
This is why people need to stock up on PHYSICAL ASAP, before their tracks start to get followed EVERYWHERE – as opposed to just Florida coin shops.
Thanks for the information.
Andy
Hi! Andy,
I am always curious how come we have severe silver shortage and market so small (< $30 B dollars) and yet silver still available (you know way better in this issue) for manipulation, and so called eastern identities would not take up all the silver available in one scoop (it is possible in theory, no? $30 B is peanut these days right). What we are missing? Our presumption is wrong? or all are so stupid except tiny "fantasy" silver bugs? Or just opposite? So far all the predictions of real experts in this field are wrong and I think their opinions are also loosing credibility. This will make situation really worse because leaders are discredited and little guys dare not follow anymore. The golden road along with silver road is littered with huge piles of little skulls.
Yonghao,
First off, you are correct in that it makes little sense that all the silver hasn’t been swept up by rich people or nations.
That said, there is NO WAY the Chinese – for instance – are going to destroy the dollar by buying a measly $30 billion of silver when they need to dishoard close to $3 trillion.
Secondly, yes, there are very few people that truly understand what’s going on, re: both silver AND gold.
Third, the data is the data, we have been in supply deficit for 15 years.
Fourth, the “experts” have been 100% right, as silver has gone from $4/oz to $50/oz, and even at $29/oz is up more than any other investment of the past 12 years.
Fifth, the GIANT, ROARING, PINK ELEPHANT in the room is the naked shorting of PAPER silver that has so distorted the market, few have ANY IDEA what is really going on – per the Cartel goal of spreading misinformation.
When PSLV did its IPO in November 2010, silver shot from $30 to $50 in six months, and that was just $575 million of silver.
This year’s $350 million PSLV offering in January caused silver to run from $32 to $37.50 before the LEAP DAY VIOLATION, again proving supply is tight.
And finally, Miles Franklin has had essentially ZERO “buybacks” from customer in many, many years. Thus, it is ALL PAPER selling.
Andy