Tax Advice for Gold Investment

Gold is thought of as a luxury, but investing in this kind of luxury can earn you a very nice income if you take advantage of this opportunity. Some paper stocks, businesses and other forms of investments can be risky. There is of course an element of risk in any form of investment. But investing in gold is one of the safer options that will make you a very nice amount of money. Even if the economy takes another dive, stocks prices fall, paper money loses its value, gold will still have value. In fact in those times gold has more value because more people turn to it. Your gold will not go down in value so you have a lot more security. But before you decide to take that step here is some gold investment advice.

Is Gold Exempt From Tax?

Despite what some less informed gold dealers will tell you, gold is not exempt from tax. Think of the gold as something that represents money, it is not something that is consumed and then loses value. Its value will not depreciate. Buying gold is almost like saving money. If you want to invest this way you need to find a company or person that understands the US tax rules for selling gold. A good financial planner can offer you some more advice and answer any questions you have about your investment plans.

gold investment

According to the IRS (Internal Revenue Service) gold is classed as a ‘collectible’ and can therefore incur a 28% rate of taxation. The form the gold takes does not matter, bars, coins and so on. This includes investments into other precious metals like palladium, silver and platinum and also includes rare coins, gold certificates, gold wafers, commemorative coins, pool gold, rounds and is regardless of size, weight or where it is (meaning whether it is held in your home or a bank).

At the moment the tax regulation says it is the seller’s role to report any earnings from gold sales and then pay 28% tax on what you gained. It is not the buyers who need to report the sale. While it may be tempting to not report any sales you make be aware that IRS do have a way to track precious metal sales. According to the Patriot Act all gold dealers have to report sellers who have made unreported sales. If you get caught you can be imprisoned and dealers can lose their business.

Internal Revenue Service

So should you make a gold investment?

The above should not scare interested people off from investing in gold or any precious metal. But now with more knowledge you can understand the transaction of buying and selling gold better and that can only help with your investment choices. Find a financial planner you feel good talking to, and one who knows what they are saying. Talk to them about the rules and regulations for investing in gold and about the taxes. That way you will not get any disappointment or nasty surprised later on and you will save money and time spent. The key to successful investment choices is how knowledgeable the investor becomes.

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