Reporting Requirements for God Investments

Privacy is an essential consideration for those who choose to invest in gold; however, reporting requirements in the United States must be met. Many investors may not realize that gold bullion and coin dealers are obligated to report certain transactions. Although these rules are simple to follow, investors should familiarize themselves with the law before transactions occur.

Dealer Reporting Requirements For Purchases

Reporting requirements play a critical role in the fight against money laundering. Money laundering is the legitimization of funds obtained initially by criminal activity– including such sources as drug trafficking, illegal gambling, and terrorist funding. Because the origins of such funds are difficult to track, the United States and other countries require financial intermediaries to create reports for large transactions. Financial intermediaries include commercial banks, investment banks, mutual or pension funds, insurance companies, and stock exchanges.

Precious metal dealers and brokers are ordered to report transactions greater than $10,000 in cash or the equivalent made with a 24-hour period. For reporting cashier’s checks, traveler’s checks, bank drafts, and money orders with a face value of under $10,000 are included in the definition of cash, along with both foreign and domestic currencies.

If a transaction triggers the reporting requirement, the seller must file IRS Form 8300 Report of Cash Payments Over $10,000 in a Trade or Business. The dealer will collect the name, address, government-issued identification, and social security number of the purchaser. Although some of the information is not required to be disclosed by the buyer, the dealer will still be obligated by law to file the form. The form is considered an integral tool in fighting money laundering, and most responsible investors will cooperate with the reporting. However, there are ways around these reporting requirements. The use of credit or debit cards, Automated Clearing House (ACH) network transactions, and bank wires are all free from being reported.

Dealer Reporting Requirements For Selling

Depending on the type of metal being sold, reporting requirements for trading precious metals are more complex. These requirements are in place for monitoring possible tax evasion. Not all bullion products are reported, so it is critical that investors know the differences. Products that must be reported include all bars and rounds with a fineness of 0.995 or 99.5% purity that are in a quality of 1kg (32.15 troy ounces) or greater. Any sale that meets or exceeds these thresholds necessitates the dealer to file IRS Form 1099-B Proceeds from Broker and Barter Exchange. The filing of this form is indicative of income to the IRS, and should be reported on the sellers income tax.

The taxation of such sales falls into the capital gains category and is subject to taxation as such. Capital gains are defined as the difference between the selling price and buying price of a particular investment. The difference, or profit, is then subject to the tax, which is only due upon the asset’s sale. Full tax implications are dependant upon other situations and beyond the scope of this article. Investors are encouraged to speak with a tax attorney or certified accountant about the long-term tax ramifications of any investments they are considering.

Certain coins are not free from the reporting obligation, including 1 oz Canadian Maple Leaf Gold Coin, South African Krugerrand, Mexican Onza, and all US coins with 90% or more silver. Sellers exchanging 25 or more gold coins or $1000 or more of silver coins will be required to report the transaction. However, currencies such as the American Gold Buffalo, Gold Eagle, and the Austrian Gold Philharmonic coins are exempt from reporting regardless of the amount sold.

Ultimately, precious metals are a solid investment and should be in any serious investor’s portfolio, but it may not be as private as some investors are lead to believe. However, the reporting requirements can be legally avoided for savvy investors who take the time to research and investigate the law. Investors should always be aware that reporting requirements are in place before making any investment– including precious metals. Reputable brokers and dealers should be able to offer advice and should encourage compliance with regulations. Compliance with federal regulations is imperative to prevent prosecution, costing far more in legal fees than the original debt owed.


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