How To to Reporting & Pertinent U.S. Laws
When buying or selling silver, there are some reportable events. The IRS and government is first and foremost after launderers of money and tax evaders. Therefore, purchasing silver (and other metals) with $10,000 and more in cash is reportable in the United States. Also, in some cases, selling silver may be reportable.
Generally, green-folding cash and sometimes cashier’s checks are reportable in increments above 10k in IRS-defined related transactions, which essentially is any transactions within a 24-hour window or any transactions entailing cash reserves from the same account or investments for the same purpose. The form here in question is IRS form 8300. The IRS, to be sure, is vague in regards to what constitutes related transactions.
When you purchase gold, silver, platinum or palladium, and you pay in the form of wire transfer, personal checks and cashier’s checks, the dealer has no reporting requirements. You could purchase as much silver as you would like in these aforementioned forms, and the dealer would not be required to report it. After all, the transaction would anyway be documented by your bank, as well as your dealers bank.
Your dealer may be required to report your sale of precious metals with form 1099-B. They are required to fill out the form if you sell metal in a form that has been approved by the CFTC for trading by a regulated futures contract, as well as is you are selling enough metal to meet the minimum required for the contract. This applies within each 24-hour period, so you could therefore sell 20 coins one day and 20 coins 24 hours later and not be required, UNLESS YOU DO THIS TO AVOID REPORTING. In this case, reporting is required. Do your dealer and yourself a favor and keep your mouth shut. After all, you are merely averaging-out your liquidation, not avoiding the IRS, right? Yes, yes you are…
As far as what exactly is reportable, it is anybody’s guess. But, what truly matter is what agents at any given time are guessing. The information on what is reportable is vague and durcheinander. For example, the IRS website refers to (25) 1-ounce gold coins since such a contract at one time was approved by the CFTC, but such contracts are no longer traded. Whether or not this exempt such contracts is unclear.
A dealer must fill out 1099-B for the IRS if you sell silver, gold, platinum or palladium in a form that the CFTC has approved for trading and satisfies the minimum requirements for such a contract. All of the transactions within a 24 hour window are considered a single sale.
Sales during a 24-hour period will be seen by the IRS as a single sale. So selling a reportable amount in two transactions more than 24 hours apart would not normally be reportable. However, if the broker has reason to suspect or decides to view the transactions as related, then there are reporting requirements. So, do your dealer and yourself a favor and keep your mouth zipped.
The only futures contracts currently traded appear to be:
1000 ounce silver contracts
5000 ounce silver contracts
100 ounce gold contracts
33.2 ounce gold contracts
In the past, there were
25 1-Ounce Gold Coins
$1,000 face value bags of 90% silver coins
silver bullion, 1099 Form exempt regarding any quantity of the following items:
- American Silver Eagle Coins
- Canadian Maple Leaf Silver Coins
- Austrian Philharmonic Silver Coins
gold bullion, 1099 Form exempt regarding any quantity for the following items:
- American Gold Eagle Coins 1 oz, 1/2 oz, 1/4 oz, 1/10 oz
- American Gold Buffalo Coins 1 oz
- Gold Austrian Philharmonics 1 oz, 1/2 oz, 1/4 oz, 1/10 oz
Above-and-beyond the purview of the aforementioned 1099b requirements, you are also required to pay capital gains on any profits you make whilst holding silver,gold, platinum and palladium. For this reason, it is important you keep some sort of paper trail of your buying, so that the IRS does not take your base purchase-line at zero.