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Legal Tender U.S Gold Eagles and Silver Eagles have lesser known tax advantages.

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#1
I'm not sure if this is common knowledge here but a search of the threads made me think that it isn't.

If you buy a bar of gold for $1,700 and use it to trade for a motorcycle three years later at a value of $7,000 then you will owe the IRS about 28% of the difference between the purchase and sale price. This is true even if the motorcycle went from being worth $1,700 to $7,000 over the same period of time. Capital gains is a way to tax inflation.

This is not true for U.S minted Gold Eagles. If you use a $50 one ounce gold eagle to purchase a motorcycle then it didn't matter what you paid for it because it is "LEGAL TENDER".

If you use a $50 Gold piece to evade any other kind of tax (such as payroll taxes or income taxes) they will nail you.
 

oldgaranddad

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#2
I'm not sure if this is common knowledge here but a search of the threads made me think that it isn't.

If you buy a bar of gold for $1,700 and use it to trade for a motorcycle three years later at a value of $7,000 then you will owe the IRS about 28% of the difference between the purchase and sale price. This is true even if the motorcycle went from being worth $1,700 to $7,000 over the same period of time. Capital gains is a way to tax inflation.

This is not true for U.S minted Gold Eagles. If you use a $50 one ounce gold eagle to purchase a motorcycle then it didn't matter what you paid for it because it is "LEGAL TENDER".

If you use a $50 Gold piece to evade any other kind of tax (such as payroll taxes or income taxes) they will nail you.
It is also a way to get around gift tax limits. If you gift someone in gold or platinum eagles at the face value that the amount the IRS has to honor. They've gone to court several times trying to find a sympathetic judge but from what I know, they have been spanked every time.

Unfortunately a poor person like me doesn't have to worry about such things, though I wish I did.
 
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#3
It is also a way to get around gift tax limits. If you gift someone in gold or platinum eagles at the face value that the amount the IRS has to honor. They've gone to court several times trying to find a sympathetic judge but from what I know, they have been spanked every time.

Unfortunately a poor person like me doesn't have to worry about such things, though I wish I did.
I didn't know this. The poor IRS hates these coins so much. There's actually an interesting backstory to why they have $50 printed on them. The original bill was going to have them be denomination-less just like the Krugerrand but the democrats added the $50 thing last minute. I guess the IRS lobbied to have them get the face value so people wouldn't actually circulate the coins as legal tender (that would've been a nightmare) the intent was to sink the whole thing.

Creative people have been using them for a long time though. There is a narrow set of circumstances where they are a great and a variety of circumstances where there is case law stating that it is tax evasion.
 

ttazzman

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#5
One on my uses for legal tender gold is to avoid/minimize/control estate taxes for my children...also in my working years I was a performance and payment bonded individual in the 8figure range fully indemnified...off the books precious metals helped mitigate indemnification risks....main reason gov hates PMs is its off the books aspects
 

GOLDBRIX

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#6
It is also a way to get around gift tax limits. If you gift someone in gold or platinum eagles at the face value that the amount the IRS has to honor. They've gone to court several times trying to find a sympathetic judge but from what I know, they have been spanked every time.

Unfortunately a poor person like me doesn't have to worry about such things, though I wish I did.
Gift up to $10,000.00 in $50.00 face value AGEs = 200 AGEs with a current spot price about $1770.00 = $354,000.00 +/- Gift.
And you can Gift yearly.
Ah, to be that rich.
:finished:
 

Cigarlover

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#7
I believe it was Ron Paul who brought or helped to bring gold eagles into existence.

Here is a case that has been brought up here before.

https://insiderexclusive.com/the-irs-vs-robert-kahre/
We have discussed this case here before. The only reason he was charged and convicted is because he was attempting to evade taxes by setting up a scheme where he paid employees in one window in gold and silver and then cashed those coins in for them in another window..

If he had just paid them in metals he would have been fine.

Bottom line is the right to contract your labor for whatever you want to is your business. You can work for corn, tomatoes, a ferrari or gold and silver. If you are working for ASE or AGE, face value is what is used.
 

GOLDBRIX

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#8
I remember that guy. I was rooting for him. When he bought back the SAEs & GAEs, that is where he screwed up.
 

Joe King

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#9
If he had just paid them in metals he would have been fine.
Yep. He didn't want the gold walking out the door. He needed it back in order to be able to make payroll next week.
 

EO 11110

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#9
I'm not sure if this is common knowledge here but a search of the threads made me think that it isn't.

If you buy a bar of gold for $1,700 and use it to trade for a motorcycle three years later at a value of $7,000 then you will owe the IRS about 28% of the difference between the purchase and sale price. This is true even if the motorcycle went from being worth $1,700 to $7,000 over the same period of time. Capital gains is a way to tax inflation.

This is not true for U.S minted Gold Eagles. If you use a $50 one ounce gold eagle to purchase a motorcycle then it didn't matter what you paid for it because it is "LEGAL TENDER".

If you use a $50 Gold piece to evade any other kind of tax (such as payroll taxes or income taxes) they will nail you.
that face value/nclt is ceremonial only. the face value to weight ratio of the 5 and 10 dollar modern eagles makes a mockery of them being real specie money

case gets stronger if you paid with actual legal tender that meets the coinage act specs

big time coin dealer, with a radio show, used to tell the story of his witnessing the treasury dept accepting a $20 bill as payment/settlement for a rare $20 gold piece that was snuck out of the mint. i think it may have been a 33 double eagle - one of the few in existence

so to treasury dept (irs?) -- a $20 bill = $20 gold piece that is actual legal tender
 
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tigerwillow1

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#10
How about the case where you buy some gold eagles for $1,000 and later sell them for $2,000? Do you have a $1,000 capital gain?
 

GOLDBRIX

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#11
that face value/nclt is ceremonial only. the face value to weight ratio of the 5 and 10 dollar modern eagles makes a mockery of them being real specie money

case gets stronger if you paid with actual legal tender that meets the coinage act specs

big time coin dealer, with a radio show, used to tell the story of his witnessing the treasury dept accepting a $20 bill as payment/settlement for a rare $20 gold piece that was snuck out of the mint. i think it may have been a 33 double eagle - one of the few in existence

so to treasury dept (irs?) -- a $20 bill = $20 gold piece that is actual legal tender
Very early on a Twenty Dollar Treasury bill held the same value as a Double Eagle.
Since then FDR allowed a Private Bank into the system to prevent recessions and depressions ( how's that worked out ?). Since the Federal Reserve was established the private banker(s) in the Fed have destroyed over 99 percent of every dollar bill's value and the higher species 5s/10s/20s/50s/100s. All other values have been deemed illegal for the citizenry to possess. Only inter-bank transfers for all species above $100.00 ( private banking use).
 

Silver

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#12
How about the case where you buy some gold eagles for $1,000 and later sell them for $2,000? Do you have a $1,000 capital gain?
That would be a 10-4.
 

GOLDBRIX

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#13
That would be a 10-4.
And that is the reason to keep receipts of those purchases OR only cash one at a time at various locations.
That is what I'd do IF I HAD ANY............. Damn, boating accident.
 

ttazzman

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#14
We have discussed this case here before. The only reason he was charged and convicted is because he was attempting to evade taxes by setting up a scheme where he paid employees in one window in gold and silver and then cashed those coins in for them in another window..

If he had just paid them in metals he would have been fine.

Bottom line is the right to contract your labor for whatever you want to is your business. You can work for corn, tomatoes, a ferrari or gold and silver. If you are working for ASE or AGE, face value is what is used.
payroll (employees) gets sticky....specifically things like minimum wage (paid in gold legal tender would be counterproductive) ....then tack on payroll taxes and insurance...

but your right as a independent contractor you can work for anything as long as you meet the independent contractor guidelines
 

ttazzman

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#15
How about the case where you buy some gold eagles for $1,000 and later sell them for $2,000? Do you have a $1,000 capital gain?
yep......good reason for buying and selling "off the books" .......theoretically anything you buy and then sell for a profit is taxable under capital gains ...but most things we buy and sell depreciate and loose value.......a good example would be a rare muscle car you bought in the 60s for 3k then put in the barn for 50 years and sell for 100k ...you have a tax problem and better see a accountant and figure out storage costs etc to offset some gains or let your son inherit it when you die so he gets a fresh tax base at time of death....
 

Usc96

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#16
payroll (employees) gets sticky....specifically things like minimum wage (paid in gold legal tender would be counterproductive) ....then tack on payroll taxes and insurance...
Sort of reminds me of the story of the court case where the lawyer insured his box of 24 cigars from fire damage, then made a claim after he smoked them. Judge said that technically he was correct because the insurance company should have had enough sense not to sell him fire coverage on cigars.

Similar to your minimum wage violation example above, the judge had no qualms with the insurance company next going after the too clever by half lawyer for arson.
 

chieftain

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#17
.a good example would be a rare muscle car you bought in the 60s for 3k then put in the barn for 50 years and sell for 100k ...you have a tax problem and better see a accountant and figure out storage costs etc to offset some gains or let your son inherit it when you die so he gets a fresh tax base at time of death....
Declare a $3,000 sale for the purposes of officialdom, use the balance to buy gold and/or silver and have an unfortunate boating accident.
 

ttazzman

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#18
Declare a $3,000 sale for the purposes of officialdom, use the balance to buy gold and/or silver and have an unfortunate boating accident.
thats great as long as the buyer will claim the same thing...and yours and his bank accounts reflect that.....and he wants to assume a tax cost base of 3k and face cap gains when he sells it.......obviously the buyer might want to be compliant due to him wanting to pay lower sales taxes on the car also

i am well versed in this ....having had a lot of very expensive equipment dozers etc that were depreciated against taxes (lowers your cost basis) ...then sold for value later ...cap gains or depreciation recapture kicks in thats why i still have a lot of expensive machinery sitting around the property LOL
 
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#19

chieftain

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#20
thats great as long as the buyer will claim the same thing...and yours and his bank accounts reflect that.....and he wants to assume a tax cost base of 3k and face cap gains when he sells it.......obviously the buyer might want to be compliant due to him wanting to pay lower sales taxes on the car also

i am well versed in this ....having had a lot of very expensive equipment dozers etc that were depreciated against taxes (lowers your cost basis) ...then sold for value later ...cap gains or depreciation recapture kicks in thats why i still have a lot of expensive machinery sitting around the property LOL
I don't know about the US, but around these parts, classic cars worth a bit of coin are very rarely paid for by bank transfer, primarily because the money has been the culmination of years of cash jobs.
 

Ensoniq

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#21
And that is the reason to keep receipts of those purchases OR only cash one at a time at various locations.
That is what I'd do IF I HAD ANY............. Damn, boating accident.
most traveling gun shows like c&e usually have 2-3 gold tables paying cash. Personally I’d not buy there and have never sold there but if I was in a pinch I’d certainly look at it

https://www.cegunshows.com/about-us.html
 

oldgaranddad

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#22
I don't know about the US, but around these parts, classic cars worth a bit of coin are very rarely paid for by bank transfer, primarily because the money has been the culmination of years of cash jobs.
Problem is that classic cars, like beanie babies, rare stamps, classic Schwinn bicycles, Lionel trains, etc. will eventually go out of style since there is not a cultivation of a collector base. Numismatics (coin collecting) almost shared the same fate but the American Numismatic Association was smart enough to create the Young Numismatist program to keep the collector base from collapsing. Even so, I think the ANA just slowed down the inevitable. Some days I think old charge cards will become the collecting rage since that is how they pay for everything now.

Unfortunately for classic cars, the kids these days didn't grow up with muscle cars, etc. nor do they have the appreciation for such things. As the collector base dies off from old age there will be more cars than collectors. Yes, there will always be people who love old cars but they won't be in the numbers to sustain the hobby/industry. If you have a classic car think hard about selling it before leaving it to your millennial grandson in the will.

At least with precious metals every generation known to man has wanted a piece of that action whether for its scarcity, monetary value or bling factor.
 

chieftain

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#23
Problem is that classic cars, like beanie babies, rare stamps, classic Schwinn bicycles, Lionel trains, etc. will eventually go out of style since there is not a cultivation of a collector base. Numismatics (coin collecting) almost shared the same fate but the American Numismatic Association was smart enough to create the Young Numismatist program to keep the collector base from collapsing. Even so, I think the ANA just slowed down the inevitable. Some days I think old charge cards will become the collecting rage since that is how they pay for everything now.

Unfortunately for classic cars, the kids these days didn't grow up with muscle cars, etc. nor do they have the appreciation for such things. As the collector base dies off from old age there will be more cars than collectors. Yes, there will always be people who love old cars but they won't be in the numbers to sustain the hobby/industry. If you have a classic car think hard about selling it before leaving it to your millennial grandson in the will.

At least with precious metals every generation known to man has wanted a piece of that action whether for its scarcity, monetary value or bling factor.
You're not wrong garanddad. My point wasn't specifically about classic cars, it just happened to be but one example. I was making the comment about how the money for whatever it is doesn't necessarily have to go through the banks and that the sorts of money that can buy things like classic cars is rarely declared here.
 

oldgaranddad

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#24
You're not wrong garanddad. My point wasn't specifically about classic cars, it just happened to be but one example. I was making the comment about how the money for whatever it is doesn't necessarily have to go through the banks and that the sorts of money that can buy things like classic cars is rarely declared here.
Agreed! Same goes here too. I've seen a rare coin purchased for small money via check and a big bag of cash under the table to keep the IRS at arms length. Same goes for several other items.
 

Ensoniq

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#25
Problem is that classic cars, like beanie babies, rare stamps, classic Schwinn bicycles, Lionel trains, etc. will eventually go out of style since there is not a cultivation of a collector base. Numismatics (coin collecting) almost shared the same fate but the American Numismatic Association was smart enough to create the Young Numismatist program to keep the collector base from collapsing. Even so, I think the ANA just slowed down the inevitable. Some days I think old charge cards will become the collecting rage since that is how they pay for everything now.

Unfortunately for classic cars, the kids these days didn't grow up with muscle cars, etc. nor do they have the appreciation for such things. As the collector base dies off from old age there will be more cars than collectors. Yes, there will always be people who love old cars but they won't be in the numbers to sustain the hobby/industry. If you have a classic car think hard about selling it before leaving it to your millennial grandson in the will.

At least with precious metals every generation known to man has wanted a piece of that action whether for its scarcity, monetary value or bling factor.
I completely agree and will add that the quality improvements over time are so vast I can’t imagine paying for the old cars of my dreams. I wanted the Countach and the 96 Porsche twin turbo sooo bad. Now I look at their interiors compared to the modern supercar and can’t even hold the fantasy. Of course I’d never waste savings on either but dreaming is free

3451973B-5A53-45E7-B833-52621C276329.jpeg
AEA67589-4AE6-4966-977E-0DBD214A4175.jpeg
 

ttazzman

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#26
You're not wrong garanddad. My point wasn't specifically about classic cars, it just happened to be but one example. I was making the comment about how the money for whatever it is doesn't necessarily have to go through the banks and that the sorts of money that can buy things like classic cars is rarely declared here.
yep just discussing the point......as in the classic car example....i would be rare a buyer would show up with 100k in cash (banks get jumpy when you withdraw 5k in cash these days) .......and rare a seller would want to stash 100k in his mattress (banks get jumpy taking in 10k cash or more) ........so records can get established without intent....but i agree just it requires planning and for thought on both ends of the transaction which rarely happens...staying under the radar is a good thing if possible....IE the proverbial boating accident
 

Joe King

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#27
OR only cash one at a time at various locations
No need to sell one at a time, at least for Eagles. As I do not believe there is a reporting requirement on sales below a certain $ amount of them.
Someone posted a chart on reporting requirements for various forms of PM's. I'll see if I can find it.

You'll still owe capital gains though. You just claim it yourself.
 

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#28
No need to sell one at a time, at least for Eagles. As I do not believe there is a reporting requirement on sales below a certain $ amount of them.
Someone posted a chart on reporting requirements for various forms of PM's. I'll see if I can find it.

You'll still owe capital gains though. You just claim it yourself.
sounds like a commodity, not money
 

Joe King

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EO 11110

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#30
Eagles are not reportable.
Bullion over a certain amount, is.

Here is JM Bullions page on what is reportable and what isn't.

https://www.jmbullion.com/reportable-bullion-transactions-infographic/


Also, anyone who prefers US 90% should take a look at that too. Apparently any sale of $1000 face value or greater is reportable.
Just something to keep in mind.
yes. 'know your customer' is required on bullion sales. not for coins -- per andy gause, also a coin dealer. this is the reason he gave for never selling bullion (commodity), just american coins. junk sales -- never had to know customer. was in the biz for 30-40 years - until untimely death last year

smartest, most learned guy i've ever listened to on these topics - a true monetary historian of american money
 

WillA2

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#31
If I were to have any such things that have not been lost in a boating accident, stacked up somewhere I would be tempted to pay my children for doing their chores around the house. Hang on to it in a secure location and pay them for their services at the most opportune time. Face value and all that. They can't help but be good savers. Hopefully it will be an inherent trait with them.
 

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#32
If you use a $50 one ounce gold eagle to purchase a motorcycle then it didn't matter what you paid for it because it is "LEGAL TENDER".
You just shift the tax burden to the motorcycle seller if you do that.
Unless he trades the (face value of $50) for something else worth $1,700. Then that person has the tax burden. If the AGE kept circulating that that — no problem. But the first one to cash it in (to FRNs) has a $50 cost basis, thus 'profit' of $1,650.

What rate, though? Regular rate or the 28% rate?

BF
 
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ttazzman

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#33
You just shift the tax burden to the motorcycle seller if you do that.
Unless he trades the (face value of $50) for something else worth $1,700. Then that person has the tax burden. If the AGE kept circulating that that — no problem. But the first on to cash it in (to FRNs) has a $50 cost basis, thus 'profit' of $1,650.

What rate, though? Regular rate or the 28% rate?

BF
and you have a tax basis of $50 on the motorcycle also.....so you saved the ~6% sales tax on the motorcycle and traded it for a future 15%> cap gains tax when you sell the motorcycle ....

most costly things in life to minimize.... intrest paid on depreciating purchases....insurance.....taxes ...do those things and you can double your effective income
 
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#34
I believe it was Ron Paul who brought or helped to bring gold eagles into existence.

Here is a case that has been brought up here before.

https://insiderexclusive.com/the-irs-vs-robert-kahre/
You just shift the tax burden to the motorcycle seller if you do that.
Unless he trades the (face value of $50) for something else worth $1,700. Then that person has the tax burden. If the AGE kept circulating that that — no problem. But the first one to cash it in (to FRNs) has a $50 cost basis, thus 'profit' of $1,650.

What rate, though? Regular rate or the 28% rate?

BF
Never stop circulating the coin. Let it be inherited or gift it. This is why I love stuff like this. On the same note, I was talking to Senator Mike Lee of Utah at Freedomfest about Goldbacks. He loved the concept but asked me about capital gains on transacting with Goldbacks. I just looked at him and sheepishly asked how many people he thought would report something like that. He laughed.
 

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#35
we have our own barter rounds to trade for motorcycles -- here's one of them

1593566435325.png
 

EO 11110

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#37
Nice. I love some of the designs on rounds.
the one i posted is from this website. it has GIM on the reverse. very limited editions -- premiums are steep on -bay