Gold is a precious metal and when you sell precious metals there are a few specific rules and regulations to follow as formulated and desired by the state and the federal government. This will keep you away from any legal hassles and obligations. Even if you sell gold overseas the law of the country in which you are selling will be applicable. This law may vary from one country to another but usually, you will need to report about such sales in two distinct sets. One is applicable to you and the other set is for the dealer through which you make the sale.
Owner And Dealer Reporting
If you sell gold or any other precious metals then as per law you will have to follow a few specific guidelines such as:
- You will need to report the profit of such sale in your annual income tax return files
- It is not dependable on the fact that the dealer has reported about his or her obligation or not.
As far as dealer reporting is concerned under specific circumstances, it is required by the law for the dealer to file a form 1099-B with the IRS. This form is useful in many ways such as:
- It helps the IRS to know about the proceeds paid to any non-corporate seller of gold
- It helps in determining whether the seller has reported about such income properly on their tax returns.
However, the IRS has the last word and specific rules to determine what type of sales need dealer reporting in this form.
Guidelines For Reporting
The International Council for Tangible Assets, ICTA has issued specific guidelines for reporting when you sell gold in NYC. These guidelines are formulated after a discussion with the IRS. However, these guidelines reflect the spirit of the negotiations with IRS but these are certainly not any ruling. Therefore, these guidelines are open to interpretation and also are subject to changes without any notice by the IRS. As you may know, things are complex with the IRS and its different guidelines which is why it is prudent that you have a discussion with your tax professional regarding this matter.
The Reportable Transactions
Usually, the ICTA guidelines for reportable transactions are specific and are as follows:
- For gold bars with minimum fineness of 0.995, the minimum reportable amount is one kilo or 32.15 troy ounces.
- For silver bars of fineness 0.999, it is 1000 troy ounce or more
- For 0.995 platinum bars, it is 25 troy ounces
- For 0.9995 palladium bars, it is 100 troy ounces
- For 1 ounce Krugerrand, Maple leaf or Mexican Onza gold as minted fineness it is 25 coins of one ounce and for
For 90% silver coins as minted, any combination of dimes, quarters and half-dollars amounting to $1000 in face value must be reported.
While selling any gold or silver jewelry, remember it is also collectible just like bullion. You must abide by the same upper limit of 28% capital gains rate applicable for precious metals and mention it in your income tax return.