Why do they put a dollar figure on coins?

[mbailey1234]

I would like to hear some theories on why they stamp $1 on a ASE and $50 on a AGE? I have been running across some interesting articles of people trying to beat the tax system by rolling these types of coins in their investments at face value rather than market value.

In some cases obviously you wouldn't want to do this. If my employer was paying me $50,000 per year I would gladly accept 1000 1 oz AGE's for my salary. On the flip side they could pay me 200,000 new quarters but the metal value would be much less obviously.

If I were to use the funds in my traditional IRA to purchase AGE's and then roll it to a roth at the tax rate of $50 per coin, I feel I would spend most of the rest of my life in prison but if gold was only $30 per ounce the IRS would gladly let me do this and more than likely require me to do this.

Lets say I were to hire someone and set their salary at $1200 or $100 per month. If I paid them 100 silver eagles ($100 face value) could I send them a W-2 at the end of the year for $1000 and make it fly?

Right now, how would the situation on pennies or nickels be any different from the AGE's? If I were to take payment of 5,000,000 pre 1982 pennies for my salary the actual melt value would be close to $125,000.

If you can't claim the value stamped on the coin as it's value, why even put it on there?

If I try something like the IRA roll, I expect you guys to chip in and get me out of jail!

[ZenOps]

http://www.mint.ca/store/coin/bluenose- ... rod1230007

How about 50 cents for 1/25 an ounce of gold? Really though, its probably some conspiracy of some sort.

[doug]

They put the dollar value on their coins so they are legal tender.

Two reasons that I know of:
1) they would be illegal to counterfiet as with any coin or currency.
2) the face value would count on the bottom line of their mint production.

Doug

[zerocd]

I have wondered why the value on the coin in no way reflects it's value. My guess is that government fiat does not want to compete with something of real value.

Relics of the empire?

I just bought one of these. Largest silver coin value I have seen. Picked it up at spot.




This one is the highest value coin I know of.................

[AGgressive Metal]

The immediate reason why is that is what Congress told the mint to do in their ASE/AGE legislation. Why they picked $1 is beyond me, but technically a coin is not a coin unless it has a denomination.

[mbailey1234]

.

[mbailey1234]

technically a coin is not a coin unless it has a denomination.

I agree but what they are doing is saying whatever scenario benefits them the most when valuing the coins is the one they are using. I would think if it applied to AGE's and ASE's it would also apply to pennies and nickels or vice versa.

I am tempted to contact the IRS just to hash this out with them since I can't seem to find anything concrete online. Not to thrilled about getting audited over it though! May be a good idea to email them from the library???

[IdahoCopper]

Here are some research starter points:

http://www.lvrj.com/news/46074037.html

http://www.rense.com/general78/defeat.htm

http://educate-yourself.org/cn/IRSdefea ... ct07.shtml

http://www.lvrj.com/news/53287717.html


As you can see, the IRS will bring suit as many times as needed to convict. Double Jeopardy clause of the Constitution not withstanding.

Its a corrupt, corrupt, corrupt, corrupt, government we got; as we all know too well.

[Aqualung48]

As you can see, the IRS will bring suit as many times as needed to convict. Double Jeopardy clause of the Constitution not withstanding.

Its a corrupt, corrupt, corrupt, corrupt, government we got; as we all know too well.

The IRS buildings in Washington DC are located where the the red light light district was during the war of northern aggression. At the time, they knew it would be tough to eliminate "the oldest profession" so it was felt best to keep it in that confined area where Army of the Potomac doctors could periodically check for loathsome diseases. It is good to know the land has maintained a continuity of purpose! Ron Paul in 2012!

[mbailey1234]

Here are some research starter points:

http://www.rense.com/general78/defeat.htm.

Thanks for posting these Idaho!

I guess it comes down to this statement in the above article.

The essence of the argument is that under the Constitution Congress is obligated by law to mint and circulate such coins as demand requires, and must establish the value of coins as they are used as legal tender, but the coins' market value, arising as valuable personal "property," is a distinct, separate attribute of such coins, and is of no legal consequence if the coins are used as legal tender.

Am I interpreting this correctly? Although the coin could be worth more (this is a distinct separate attribute of the coins it says), you can freely use them at face value for legal tender with no legal consequence?

Like the gold and silver coins, this is what's happening on pre 82 pennies. They can be and are worth more than 1 cent but the actual "value" of the metal in them is worth around 2.5 cents. It is still legal though to pay someone in pennies and only value them at their face value.

[zerocd]

Here are some research starter points:

http://www.rense.com/general78/defeat.htm.

Thanks for posting these Idaho!

I guess it comes down to this statement in the above article.

The essence of the argument is that under the Constitution Congress is obligated by law to mint and circulate such coins as demand requires, and must establish the value of coins as they are used as legal tender, but the coins' market value, arising as valuable personal "property," is a distinct, separate attribute of such coins, and is of no legal consequence if the coins are used as legal tender.

Am I interpreting this correctly? Although the coin could be worth more (this is a distinct separate attribute of the coins it says), you can freely use them at face value for legal tender with no legal consequence?

Like the gold and silver coins, this is what's happening on pre 82 pennies. They can be and are worth more than 1 cent but the actual "value" of the metal in them is worth around 2.5 cents. It is still legal though to pay someone in pennies and only value them at their face value.

You didn't follow all the links.

[silverflake]

What we really should do is put a precious metal value on currency. Instead of calling it "one dollar" we should peg it to silver and put "1/35th ounce Ag". Then you wouldn't have to worry about the useless dollar denominations which are consistently losing value anyway.

Keep stacking.

[mbailey1234]

Sure I did Zercd,

If the Supreme Court has ruled, they are kind of the end of the road in court on the principle of this issue. I feel the last link was the Feds finally finding another angle where they could nail him.

This court case has been a good contribution to this discussion but still hasn't lead me to a ruling or specific tax law that answers my question 100% in regards to the Traditional IRA to Roth rollover.

From the government's or the IRS's perspective wouldn't it be wise to not have coinage that is worth more in melt value than what the face value is if we aren't using anything but a fiat system? Wouldn't it be safe to say that when they nixed the gold standard, this whole thing with face value on a coin went haywire.

[mbailey1234]

What we really should do is put a precious metal value on currency. Instead of calling it "one dollar" we should peg it to silver and put "1/35th ounce Ag". Then you wouldn't have to worry about the useless dollar denominations which are consistently losing value anyway.

Keep stacking.

Exactly but this is the same thing that the gold standard was

[silverflake]

You are correct mbailey1234! Let's hurry up and get back to the gold standard too. In the meantime - keep stacking!

[Silver Addict]

I believe the $50 on the GAE reflects the fact that the gov't values gold on their books at $42/oz

[saltydecks]

You can pay me 1000 ASE at 100 coin salary per month... what's the job?

[SilverEye]

There's no way to can get paid in precious metals at face or sneak them into a retirement account. That would be a loophole big enough to drive an armored truck through.

Rich people would never pay income tax. You could defer all income buy funding your Roth IRA with an initial $5k, having your employer sell you 100 AGE's at face, selling those at market price, and use that money to buy more AGE's at face from your employer, and so on. Roth IRA's let your investments grow tax free, and then withdrawals are tax free also. You could transfer millions or even billions and never pay income tax on it. I'm sure the IRS would not be amused.

[mbailey1234]

Lets say for sake of argument that I went to work for a $100 per month salary and you paid me in AGE's which would have a market value of approx $3500. I would have to claim a W-2 for $1200 annual income. If I did nothing further that would be it. If or when I sold them to get cash I would also have to claim those earnings, possibly as capital gains but not sure how that works. If they were sold in a Roth which is tax free earnings why would you have to pay anything?

If those $50 coins were in a roth though, that's all tax free earnings. Haven't the courts ruled that the market value doesn't matter (of no legal consequence) if it's used as legal tender.

If copper goes to $10 per pound, you realize that pre 82 cents will be worth about 6.5 cents each. Are they going to look at this the same way as gold and not let you claim face value any more? A $50k salary paid in pennies would be a $325 market value. "has no legal consequence if it's used as legal tender."

I don't dispute the IRS would throw an absolute fit, but other than people saying "that sounds nuts" I have yet to find anything that is in their "handbook" that clearly states how they look at this.

[ZenOps]

There's no way to can get paid in precious metals at face or sneak them into a retirement account. That would be a loophole big enough to drive an armored truck through.

Rich people would never pay income tax. You could defer all income buy funding your Roth IRA with an initial $5k, having your employer sell you 100 AGE's at face, selling those at market price, and use that money to buy more AGE's at face from your employer, and so on. Roth IRA's let your investments grow tax free, and then withdrawals are tax free also. You could transfer millions or even billions and never pay income tax on it. I'm sure the IRS would not be amused.

Maybe in the US. In Canada, we are allowed to put physical gold and silver into an RRSP. In Alberta, there is no tax on the purchase of gold or silver either, just like there is no tax on food like bulk peanuts (but there is a tax on things like salted peanuts, salted peanuts being a "finished" product)

Gold and silver are considered to be as basic a right as food is - and not taxable (on purchase)

Canada may allow nickel bullion someday. If you wanted to save one cubic meter of 5 cent Canadian nickels ($450,000 in 2007) and had the storage space to do it, I'm pretty sure they would get around to it.

Nixon only forced you americans off gold (and most metals) as money. The rest of us still have the capacity to keep and use our money as we see fit. Its the one great advantage of being in a commonwealth under a crown - is that the money *has* to be real or all the colonies would just print up money and devalue their currencies against other commonwealth nations.

[cesariojpn]

See 31 U.S.C. § 5112(h) for your answer.

[Mossy]

As you can see, the IRS will bring suit as many times as needed to convict. Double Jeopardy clause of the Constitution not withstanding.

ATFE does the same thing. Drive the victims into bankruptcy. Other agencies might be doing likewise, I have not heard.

[mbailey1234]

See 31 U.S.C. § 5112(h) for your answer.

That was a very interesting link. Here are some highlights in regards to the issue at hand.

First of all here is a definition of Numismatic value:

Numismatic value may be used to refer to the value in excess of the monetary value conferred by law. This is also known as the "collector value." For example, a collector may be willing to pay more than $2.00 for a United States two-dollar bill, given their low circulation.

The following that I have copied and is in regards to ASE's. It goes through the specifications of what the coin must be. First point is they are considered numismatic items. OK so case closed right? Not quite. How about section (h)? Legal tender they say? So they are considered legal tender, I could in theory go into town tomorrow and buy gas or pay my taxes using the $1 ASE or $50 AGE right? At what value though? It would seem to me that although the market or "numismatic value" is much more than the face value, you can still use them as legal tender which is the value stamped on them.


(3) Numismatic items.— For purposes of section 5132 (a)(1) of this title, all coins minted under subsection (e) shall be considered to be numismatic items.
(e) Not withstanding any other provision of law, the Secretary shall mint and issue, in qualities and quantities that the Secretary determines are sufficient to meet public demand, coins which—
(1) are 40.6 millimeters in diameter and weigh 31.103 grams;
(2) contain .999 fine silver;
(3) have a design—
(A) symbolic of Liberty on the obverse side; and
(B) of an eagle on the reverse side;
(4) have inscriptions of the year of minting or issuance, and the words “Liberty”, “In God We Trust”, “United States of America”, “1 Oz. Fine Silver”, “E Pluribus Unum”, and “One Dollar”; and
(5) have reeded edges.
Section (f) was irrelevant to this.
(g) For purposes of section 5132 (a)(1) of this title, all coins minted under subsection (e) of this section shall be considered to be numismatic items.
(h) The coins issued under this title shall be legal tender as provided in section 5103of this title.

31 USC § 5103 - LEGAL TENDER
United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.

Call me crazy but I did call the IRS toll free hotline at 4:40 this evening. After being on hold for 35 minutes, I was disconnected. I called back and it took 2 hours 25 minutes and I got through to a woman that barely spoke english (she said she was in Portland) and she had no clue what I was talking about. She transferred me to someone who handles schedule D questions (another 38 minute wait) and this gentleman say's sorry but he wasn't qualified to answer that type of question and I need to speak with someone who handles "complex tax law" questions which was where I was transferred to the first time. I am still on hold at 8:15. Thank god for speaker phones!

I don't give up easily.

[penny pretty]

Im sorry is canada still a commonwealth? not a country?wheres the euro?

[mbailey1234]

OK every person has it's breaking point. It's 8:50PM and I am getting the feeling "they" have gone home for the night. So over 4 hours later, I surrender...... for tonight anyway.