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Foreign PM Coins: Problems With Taxes?



April 28, 2010 – Comments (6) | RELATED TICKERS: SLW , SLV , CEF

Dear Fooldom,

Has any one had experience with selling foreign precious metal coins? I ask because a friend of a friend stated that he was told not to buy foreign precious metals in the form of coins because of extra taxes you would have to pay once you sell them because of their foreign origin. I did not enquire further as I had a full house in hand and was debating if I should raise or call.

Is this true or a bunch of bologna? I have used YHOO and GOOG to try to solve this question. I checked the IRS website and can see no metion of it.

This subject piqued my interest because I have been thinking about adding some physical silver to my holdings. APMEX has some Mexican silver coins that I think are fascinating.

I thank you in advance for your input.


6 Comments – Post Your Own

#1) On April 28, 2010 at 3:34 PM, ChrisGraley (28.63) wrote:

I don't normally buy coins, but I'm unaware of any tax consequences  of them being purchased in another country.


There are tax consequences in buying any PM's currently though, as they are considered collectables and have a higher Capital Gains tax.

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#2) On April 28, 2010 at 3:35 PM, Griffin416 (99.97) wrote:

I actually own gold and silver purchased through Apmex. I bought krugerands and silver bars. Although later I figured out I could just buy UGL and AGQ. I have bought and sold (for a profit) a few times. IThere are no tax consequences if the one time amount is, I believe, under $10,000. When I sold my coins during the last gold spike I simply said could you write me a few separate checks? No problem. You could also purchase gold through your IRA.

Secondly, don't let people fool you into saying that some bullion is more liquid than others. Real gold buyers, know what it is and don't ask questions.

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#3) On April 28, 2010 at 3:38 PM, Griffin416 (99.97) wrote:

Or more simply, if you don't believe me, you must pay taxes on stock sales. But gold buyers do not send you a 1099. 'nuff said.

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#4) On April 28, 2010 at 5:28 PM, MikeMark (29.02) wrote:

The tax consequences of precious metals are normally due to sales taxes in the state in question. Assets that are not money themselves are subject to sales tax. US denominated coins that have a US dollar value printed on them are recognized money. It doesn't matter if they are gold, silver, copper, nickel, brass or glass (if they ever stoop that low). Money itself isn't taxed.

Foreign coins or bullion are not recognized as money. They can be taxed. Many states don't have a sales tax. Buy and sell there.

Ron Paul has been trying to get this taxation problem changed for about 35 years. Basically gold is money. It should be recognized as money and not subject to sales or exchange tax whether it is a domestic or foreign minting.

As far as capital gains are concerned, my question is: where was the gain? If you buy 1000 grams of gold and you sell 1000 grams of gold there has been no gain. It is still 1000 grams of gold. But they claim that the gain was in money. That's wrong, but how do you fight it?

Cap gains probably won't matter anyway. Really the reason for owning gold is for protection against a corrupted monetary system. Since that's the reason, you don't sell unless you have no other choice. It's the best form of savings anyway. Name a savings vehicle that returns 16% - 22% a year for 10 years. Maybe BRK. After all Buffett did say, "It's as good as gold."  ;)




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#5) On April 28, 2010 at 5:58 PM, MikeMark (29.02) wrote:

Oh there's another side note on this. Back when it was illegal to own gold as an individual, you could still own numismatic coins. Those are basically recognized as collectors items and it wasn't illegal to own them. There's still other costs involved in ownership, so you have to take that into consideration in ownership.

There are lots of ways to own gold (or silver). I think the best is physical US coin, but you may also want to look into Their system includes holdings in a few special vaults in places like Switzerland, UK and Hong Kong. The onwership contract is written in a way that gives you ownership of your holding, so there is a small storage fee involved depending upon the holding size. They tend to be the lowest in frictional costs.

I don't mean for this to be an advertising plug for them. I thought the information would be useful to you.


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#6) On April 30, 2010 at 9:34 AM, catoismymotor (< 20) wrote:

Thank you for the input, everyone.

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