Results 1 to 8 of 8

Thread: possible new tax loophole per my accountant

  1. #1
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default possible new tax loophole per my accountant

    what do you experts think of his interpretation ...

    " ===IRS Rules from their Web Page ====

    "Sales of precious metals. A sale of a precious metal (gold, silver, platinum, or palladium) in any form that may be used to satisfy a Commodity Futures Trading Commission (CFTC)-approved regulated futures contract (RFC) if the quantity, by weight or by number of items, is less than the minimum required to satisfy a CFTC-approved RFC. A sale of a precious metal in any form that cannot be used to satisfy a CFTC-approved RFC is not reportable.

    For example, Form 1099-B is not required to be filed for the sale of a single gold coin in the form and quality deliverable in satisfaction of a CFTC-approved contract because all CFTC contracts for gold coins currently call for delivery of at least 25 coins.

    Sales of precious metals for a single customer during a 24-hour period must be aggregated and treated as a single sale to determine if this exception applies. This exception does not apply if the broker knows or has reason to know that a customer, either alone or with a related person, is engaging in sales to avoid information reporting."


    Obviously, The IRS defines precious metals as a capital asset
    from

    "Precious Metals and Stones, Stamps, and Coins

    Gold, silver, gems, stamps, coins, etc., are capital assets except when they are held for sale by a dealer. Any gain or loss from their sale or exchange generally is a capital gain or loss. If you are a dealer, the amount received from the sale is ordinary business income. "


    thus the interpretation is that #1 the sale of any gold or other precious metal which has been held for more than one year qualifies for capital gains tax rates of 15% maximum, and #2 that the sale of any gold or other precious metal in quantities less than a single commodity contract (i.e. 24 coins/ounces or less) is below the IRS reporting threshold for brokers and individuals.

  2. #2
    God/dess
    Joined
    Nov 2004
    Posts
    2,352
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default Re: possible new tax loophole per my accountant

    So you dont pay taxes /capital gains on 24 or less coins ? For example what is the market value of 24 gold coins - or give me some idea about how much the exchange would be . Im not very coin saavy

  3. #3
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: possible new tax loophole per my accountant

    24 one ounce gold coins would sell for about $550 each or $13,200. If somebody happened to have bought them at $275 each a few years back, the capital gain would be $6,600. Platinum would be about double that amount.

  4. #4
    God/dess
    Joined
    Nov 2004
    Posts
    2,352
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default Re: possible new tax loophole per my accountant

    Thanks a good chunk of change !

  5. #5
    Member Jon_CPA's Avatar
    Joined
    Nov 2004
    Location
    Atlanta
    Posts
    50
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default Re: possible new tax loophole per my accountant

    Quote Originally Posted by Melonie
    what do you experts think of his interpretation ...
    <Et al deleted>

    Quote Originally Posted by Melonie
    #2 that the sale of any gold or other precious metal in quantities less than a single commodity contract (i.e. 24 coins/ounces or less) is below the IRS reporting threshold for brokers and individuals.

    Melonie, I think you have, or at least I hope you have, misunderstood your accountant.

    The the 1099-B reporting requirements only exempts the broker from having to file a 1099-B for the sale of single commodity contracts below the IRS reporting threshold. It does not exempt the taxpayer from reporting the gain/loss of the transaction on their tax return! While this reporting requirement may reduce the likelyhood of such a failure to report by a taxpayer from being dectected, it does not absolve the taxpayer from the responsibility of reporting the transaction, nor does it diminsh the finacial and/or leagal consequences for failing to do so.

  6. #6
    Senior Member DanMorris95156's Avatar
    Joined
    Apr 2005
    Location
    San Jose, CA
    Posts
    94
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default Re: possible new tax loophole per my accountant

    I concur with Jon - the 1099 filing requirement by a broker has no bearing on the taxability of a transaction. Additionally, the whole concept of 1099 filings leads people that don't receive them to believe (falsely) that income that should be reported doesn't have to be reported because of the lack of a form 1099. A taxpayer is responsible for the true and correct reporting of their income and correct determinatin of tax without regard to 3rd party filings.

    Regards,

    Dan Morris
    Daniel D. Morris, CPA
    [email protected]

  7. #7
    Veteran Member TarynJolie's Avatar
    Joined
    Oct 2005
    Posts
    572
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default Re: possible new tax loophole per my accountant

    I just wanted to emphasis the point made earlier in this thread that the "loophole" being suggested here could have very real legal consequences for anyone who tries to circumvent the tax laws by using it.

    Furthermore I consider it bad form for someone to advise others to break the law.

  8. #8
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: possible new tax loophole per my accountant

    ... ^^ this is exactly why I requested an opinion from our experts ! It sounded too good to be true.

Similar Threads

  1. TORONTO Girls: Help! Tax Accountant?
    By 242_fair in forum Dollar Den
    Replies: 2
    Last Post: 08-13-2012, 11:49 AM
  2. Tax Accountant in NJ
    By LatinaDancerNJ in forum Dollar Den
    Replies: 3
    Last Post: 02-25-2012, 12:20 PM
  3. Turbo Tax/Other E-tax or Accountant?
    By sammii in forum Camming Connection
    Replies: 16
    Last Post: 10-14-2011, 07:54 PM
  4. SUV tax Loophole
    By Hello~Kitty in forum Political Poo
    Replies: 44
    Last Post: 04-24-2005, 08:21 AM
  5. Tax Accountant in NJ
    By LatinaDancerNJ in forum Stripping (was Stripping General)
    Replies: 0
    Last Post: 01-06-2005, 08:18 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •