Franklin, one of the biggest questions we receive regards the taxation and
reporting requirements of Precious Metal transactions. We do not dispatch tax
advice, but are aware of related reporting requirements, many of which are
quite liberal. In our most recent Webinar – the April 25th
“Precious Metals Q&A Rap Session” – Miles
Franklin’s President, Andy Schectman,
discusses such requirements in detail, starting in the first minute.
Precious Metals Q&A Rap
I am extremely excited about the prospect of U.S. States accepting
government-minted bullion coins as “legal tender,” empowering
them to pay off debts or barter private transactions. Last year, Utah became
the first state to make this LAW, yielding potentially VERY lucrative reasons
– aside from the countless others I discuss – to purchase
PHYSICAL gold and silver Eagles.
now Accepts Gold and Silver – Andy Waldock
article above, describing what is now LAW in Utah:
provides for transactions based on the weight of the metals to determine
their value, rather than face value. This allows the use of gold and silver
bullion to be used as payment, rather than the limited scope of federally
minted precious metal coinage.
words, you could conduct private transactions based on coins’ MARKET
VALUE, not their FACE VALUE. Next:
Bill 157 will now treat precious metal transactions just like currency
exchanges. In other words, if you ask for change for a $100, you’ll get
the entire $100 back. You’ll be able to cash in your precious metal holdings
for fair market prices or, simply use precious metals to make purchases,
payments or deposits. The law states that metals don’t have to be
accepted but, if they are, it will be by weight of the metal and the market
price for it.
worth of coins can be exchanged for $100, which if I read this correctly,
infers NO CAPITAL GAINS TAXES on previous purchases of U.S. gold and silver
Eagles – and possibly gold Buffaloes, also minted by the U.S.
government. Again, Miles Franklin does not give tax advice of any kind.
However, the below statement renders that point moot, suggesting the ability
to exchange your coins to the Utah state government for cash, free of taxes.
the kicker, as I’ve read it, is Utah will offer a one-time tax credit
to offset capital gains on any metal that is being exchanged for paper. The
capital gains and tax reporting nature of getting out of your holdings will
work like a currency exchange. This eliminates the physical black market or,
shadow market of physical transactions. This will avoid multiple calls while
shopping transaction values and eliminate the tricky conversation of tax
the only comment I’d debate is the writer’s disrespect of Utah,
in my experience one of the best managed States in the Union! Don’t
think they don’t understand the value of citizens paying them taxes in gold and silver bullion, as well as
exchanging such coins for WORTHLESS fiat dollars.
have thought that seldom mentioned Utah would be the pioneer of such forward
Utah, five other States have submitted similar bills for legislation,
including South Carolina – likely the second State to pass such a LAW
– Tennessee, Iowa, and Miles Franklin’s home state of Minnesota.
If Minnesota does create such a LAW, it will increase our firm’s
flexibility in transacting with clients, heightening the advantage of doing
business with us.
To Use Gold and Silver as Legal Tender
the reason this topic has come into play is the fear of Federal
Reserve generated HYPERINFLATION. Thus, if such laws do pass en masse,
it likely will due to massive social, political, and economic upheaval, the
type that would make the nation a far more dangerous place. That said, all we
can do is take steps to PROTECT OURSELVES, and one such step is to be aware
of potentially favorable legislation – and legal jurisdictions –
as we head toward the END GAME of the U.S. dollar.