It is no doubt that gold is a luxurious kind of investment, but come to think of it, its luxury can you lead you to a wealthy lifestyle. Investing in gold is surely an excellent business opportunity. While some businesses are too risky to engage with, gold is an absolute win-win scenario. You will never lose what you have invested. Thus, no matter how erratic the economy is, still you are at a winning end. Your money will never be put to waste. The reason why gold is valued this much is that there is a scarce resource for this precious metal. Investing in gold is more secured because its value does not depreciate, unlike currencies. So is it worth it? Definitely! However, before you start investing with the first gold dealer you meet, you should first understand some tax advice for gold investment. Most gold dealers say that gold is exempted from tax. This is completely untrue. Read on to get more information on gold investments.
You must always consider gold, not just a form of investment, but an instrument that represents money. Buying gold is not like buying a tangible object that loses its value when consumed. Gold is equal to money and its value does not depreciate. Therefore, gold purchase is like money saving in the long run.
Current Gold Tax Rules
The current tax rules for selling gold in the United States should be understood by individuals and companies who are planning to invest in gold. If necessary, consult a financial planner to explain the mechanics to you and to guide you with regards to your investment plans. Gold is classified as a “collectible” according to the Internal Revenue Service or IRS. This is why this precious metal incurs a tax rate of 28%. This is applied to gold no matter what form it is. It is also applied to other precious metals such as silver, palladium, and platinum.
Specifically, the rules with regards to gold tax are designated to all types and forms of gold bullion coins. This also includes those rare coins collected by numismatics. It is designated to other precious metals such as those mentioned earlier, no matter what weight and regardless of where it is held (i.e. home or banks). Tax is also designated to gold wafers and gold certificates, as well as pool gold, rounds, and those commemorative coins.
Although the current regulation does not require buyers to report the sale of gold, it is the seller’s obligation to report the gain you got from the sale and pay 28% of what you have gained. This is one important tax advice for gold investment. It may seem alright not to report any sale you have made with your gold investment, however, IRS has a method to track unreported sales. How would IRS know? All gold dealers are obligated to report any unreported sales from sellers due to the Patriot Act. Never underestimate this because it may lead to imprisonment. Hence, gold dealers shall be suspended, or worse be terminated from their business, once they are caught with any illegal activity.
To Invest or Not To Invest
This tax information and tax advice for gold investment is stated not to scare off interested investors but to make them aware of the real deal. Buying and selling gold is a type of transaction. Every transaction comes with rules and regulations. Ask a financial planner about everything with regards to taxes to ensure that you are on the legal side. It is indeed an assurance and a form of security on the part of the seller and buyer to know about the current tax designation with regards to other precious metals. This will save time, effort, and a great deal of money for both parties to be knowledgeable about these types of taxes. Remember that the success of a gold investor lies on his knowledge about investing in gold.
Aaron Kutchinsky is a writer, lecturer, and committed financial activist.
In 2010 Aaron created and founded Guardian Gold & Silver as a definitive and groundbreaking alternative to the gold industry norm, a mission-oriented and revolutionary precious metals company with 3 specific goals in mind:
Do the right thing.
Lead others to understanding.
Get as many into the boat as possible.