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Bullion Bars, Ingots, Coins, Numismatic Coins, Rouinds etc.
Go to bottomPage: 123
TOPIC: Taxes on Bullion
#9405
Re: Taxes on Bullion 3 Years, 1 Month ago Karma: 10
In the UK the Royal Mint has stated on their website that the gold Sovereign is not subject to capital gains tax or to inheritance tax, so for a lot of people the Sovereign would be a good way to invest in gold: the half Sovereign might be seen as more affordable to some and also of more use should it ever be needed as real currency for purchases.(Jeff: does the Royal Canadian Mint still issues Sovereigns? They used to. What is the status of a Sovereign in Canada concerning tax?)
THe UK charges VAT at 20% on silver purchases.
Holding gold or silver through James Turk's goldmoney.com means, in the UK, that you can avoid the VAT on silver as long as you do not take delivery (just keep it in the goldmoney allocated vault..... outside the banking system). Goldmoney also has the concept of being able to make exchanges or purchases in gold grams with other goldmoney account holders. I wonder how the tax authorities will eventually deal with this sort of thing? You are not making a capital gain by converting back to $ or £ but in theory, if more individuals and companies have goldmoney (or similar) accounts and start trading with each other you have effectively got gold (or silver) working as an alternative currency without ever converting back to paper. I think bullionvault has a similar concept although I'm not sure whether they allow trading between account holders.
Norbull
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#9412
Re: Taxes on Bullion 3 Years, 1 Month ago Karma: 261
Thanks for the info Mathnerd.

Philipz, that would be very good news if it is true, but it is "news" to me. Would you be able to direct to me some link or statute where you saw this?

Thanks.
Jeff Nielson
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#9413
Re: Taxes on Bullion 3 Years, 1 Month ago Karma: 261
Norbull, thanks for the info.

Understand the general principle here: there is NO justification for EVER imposing any sales taxes or capital gains taxes on bullion IF we are acquiring it and using it as "money".

In that respect it's no different than when we acquire a foreign currency to go on vacation. Because we acquired that currency to SPEND IT, there are no capital gains (or losses) payable on that transaction - period.

So while we are hearing about various "loopholes" and "exceptions", the fact is that most of these tax regulations (where tax IS payable) or hypocritical and outrageous. Our governments impose "capital gains" on our profits on our bullion (currency) - but will NOT allow people capital losses on their paper currency.

Should our governments impose even MORE outrageous/hypocritical taxation on bullion-holders, then I recommend "civil disobedience". In this respect, holding "physical" bullion is superior - as though many PURCHASES are now being recorded by authorities we have no obligation to report the sale/disposition of any of our bullio.

So (for example) should "confiscation" become a reality and our governments start 'sniffing-around' for our bullion, we would have to inform that "regretfully, we have ALREADY disposed of all of our bullion".

While that explanation may not satisfy authorities, if they receive the SAME explanation from MILLIONS of people, they would be powerless.
Jeff Nielson
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#9424
Re: Taxes on Bullion 3 Years, 1 Month ago Karma: 10
Interesting interview on taxation of gold & silver at the State level in the US, and how this impedes moves towards a gold standard or putting gold and silver into circulation.



Jeff, if I seem to making too many references to goldmoney etc please let me know. I don't want to be pushing James Turk's views if they conflict with or overlap any of your sponsors but a lot of what he has to say makes a lot of sense!
Norbull
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#9430
Re: Taxes on Bullion 3 Years, 1 Month ago Karma: 261
Norbull, this is an "open forum". I see no evidence of you "pumping" anyone. Indeed, until you drew attention to "many references" to the GoldMoney site I hadn't even noticed it.

Now if you were trying to "talk up" KITCO around here, then we might have a different outlook (lol). Obviously (while somewhat "mainstream") James Turk is a respected, legitimate commentator in this sector - rather than being some Nadler-like banker shill.

Now I need to find a few minutes to look at this clip...

However, the CONCLUSION I will reach has likely already been stated by yourself: that this is a means (likely deliberate) to discourage the accumulation of precious metals by individual Americans - by making commerce with these CURRENCIES as impractical as possible.
Jeff Nielson
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#9447
Re: Taxes on Bullion 3 Years, 1 Month ago Karma: 26
Here's the link Jeff. www.cra-arc.gc.ca/E/pub/tg/t4037/t4037-e.html

You can see that coins are classified as LLP

Listed personal property (LPP) - is a type of personal-use property. The principal difference between LPP and other personal-use properties is that LPP usually increases in value over time. LPP includes all or any part of any interest in or any right to the following properties: prints, etchings, drawings, paintings, sculptures, or other similar works of art; jewellery; rare folios, rare manuscripts, or rare books; stamps; and coins.
then they state

Because LPP is a type of personal-use property, the capital gain or loss on the sale of the LPP item is calculated the same way as for personal-use property. For more information about these rules, see "Personal-use property".
and under personal-use property, it states

When you dispose of personal-use property, you may have a capital gain or loss. To calculate this gain or loss, follow these rules:
  • If the adjusted cost base (ACB) of the property is less than $1,000, its ACB is considered to be $1,000.

  • If the proceeds of disposition are less than $1,000, the proceeds of disposition are considered to be $1,000.

  • If both the ACB and the proceeds of disposition are $1,000 or less, you do not have a capital gain or a capital loss. Do not report the sale on Schedule 3 when you file your return.

so if the ACB (price you bought it at) and the proceeds of disposition (price you sold it at) are less than $1,000, you dont have to pay capital gains.
philipz
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#9450
Re: Taxes on Bullion 3 Years, 1 Month ago Karma: 261
That is a wonderful find Philipz!

I'm going have a closer look at this, however, it certainly appears to be as you describe it. Now having a background in tax law, let me WARN everyone that if you get in the "habit" of buying and SELLING these pieces of "personal property" on a regular basis the tax-man will likely deem you to be a "professional trader" and thus all the gains on your gold (or silver) would be treated as regular INCOME for tax purposes (and FULLY taxable).

So understand that the rule presented by Philipz is yet further "protection" for those of us who are acquiring our bullion to "spend" as MONEY.

Pay close attention to this important distinction, and we can likely LEGALLY save ourselves an enormous amount on taxes.
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Last Edit: 2011/06/14 19:46 By Jeff Nielson.
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#9518
Re: Taxes on Bullion 3 Years, 1 Month ago Karma: 26
Found it years back in the kitco forum and bookmarked it, but when i went back to see it, it was locked unless you become a member. So i said what the hell and signed up and even after that, i had to wait a week before getting access to it.

Well I doubt waiting for gold to triple will happen often enough for anyone to be considered a trader, but of course I will never sell my PMs unless i'm in need of the money and hope that one day i can spend it.

I personally liked Mike Maloney's definition of money and currency, where money is gold and silver and currency is fiat. He had it in his excellent Gold & Silver DVD he published recently on youtube.

philipz
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Last Edit: 2011/06/15 16:55 By philipz.Reason: youtube got embeded
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#10375
Re: Taxes on Bullion 3 Years ago Karma: 2
So would there be any issue in swapping $5 face value SMLs for $50 face value Gold Maples, or vice versa, in regards to CGT?
RMP
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Last Edit: 2011/07/20 02:07 By RMP.
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#10379
Re: Taxes on Bullion 3 Years ago Karma: 261
Interesting question RMP, as I haven't been thinking at all about people buying/selling/swapping gold for silver (or vice versa).

However, the SAME rules which apply to swapping PAPER currencies for each other should also apply whether we are swapping metal "money" for other metal money or metal for paper. And the basic rule is that if you SWAP one form of money for another with the sole purpose of SPENDING that money at some point in the future, then no taxes should be payable.

The obvious example (which occurs MILLIONS of times each day) is when people acquire another currency for purposes of travel.

On the other hand, if you swap one form of money for another (regardless of whether it's paper or metal) for the purpose of SELLING the new currency for a profit, then you are (a) treating these currencies as "commodities", and (b) obviously engaging in "trading".

Under those circumstances, capital gains taxes will ALWAYS be payable on those transactions. Thus what is most important is not the precise nature of the transaction (i.e. which currency is being swapped for which) but rather the MOTIVE behind the transaction.

I tell readers every day that I am acquiring my bullion as "insurance" to SPEND (as "money") when needed - with that "need" likely coming sooner rather than later. I never "sell" my bullion. Thus I have demonstrated the "good faith" INTENTION to acquire my gold and silver as "money", and to "spend it" as money.

As such there should be no "capital gains taxes" owing on ANY transaction where I am making a purchase with my gold and silver money.
Jeff Nielson
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Last Edit: 2011/07/20 12:12 By Jeff Nielson.
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