Taxes and Pre-1964 Silver Coins

[ardorlan]

If i only accept pre-1964 silver coins and I sell something for $10,000 Face Value (like a house)
I only have to pay taxes on the face value aka $10,000?? not the melt value $300,000.

That is the question

[ardorlan]

here is a link to a story

http://www.rapidtrends.com/robert-kahre ... s-and-doj/

[NHsorter]

Great article, thanks. I have thought of this before(daydreaming). Although probably constitutional and technically legal, I doubt you could get away with this. Truly, do you think that most judges and IRS agents really care what the constitution says? You better just get in line and pay your share unless you have an affection for court and/or prison.

[Lemon Thrower]

the IRS would tax you on the fair market value of the coins, and would fight you all the way to the Supreme Court if need be.

so while that may not be right, that is reality.

[Treetop]

what if both parties decided to keep it under wraps so to speak? I mean this sounds like a "cash" deal... no loans. Seems to me it could be done safely if both parties stuck to their stories.

[NHsorter]

Maybe if both parties never said the word Silver when being questioned and no one else ever knew that silver was used. Contract certainly could not say silver. Might be tough to pull off with real estate.

[Know Common Cents]

What if the value of the silver you spent went up 25% and the value of the house (based upon market comparables or the tax assessor) was 25% below the dollar amount equivalent you paid at the time of closing? What would the house actually be worth then? Likely only the market value. Too complicated for me. With historically low interest rates for home mortgages, I'd rather do the financing deal and use my available cash to buy more Ag and Au. As PM prices continue to rise (hopefully more than just wishful thinking on my part) you can always sell your treasure trove of PMs and pay off or pay down the home loan.

I guess if I wouldn't qualify for a home loan or for a different major purchase, I'd hold out until I did without doing an "all in" on my silver.

[BamaJoe]

Not that I'm admitting a damn thing, but it can and has been done.

[Sheikh_yer_Bu'Tay]

The man in the article made several mistakes. The biggest was he would buy back the gold and silver coins for FRN's and then recycle the coins for the next payday with the same men. In this way he established fair market value in FRN for his own coins.

Fair market value for a tangible item is what the buyer and seller agree to. You can sell your car to someone for $1.00 FRN and no one is going to put you in jail over it.

You can even gift something to someone without it being a taxable event. When I studied up on it 20 years ago, it was $10,000 per year per person. You could gift your estate away to your loved ones at $10,000 per gift, per year, per person. That gifting includes all tangible assets, including real estate.

IF, ( and that is a really big IF) buyer and seller keep their mouths shut about the nature of the exchange being in gold or silver, there is no reason for any government agency to question it. You will have exchanged value for value.

The trouble is IF someone gets audited and gets scared. Then you can bet your bottom dollar the other guy is going to rat you out to try to save their own skin.

[Oakair]

Pretty sure the IRS could reference a post like this and claim intent to defraud, no?

Or am I giving the IRS too much credit regarding the extent of their ability to uncover such electronic traces...Im not at all knowledgable on the subject, so just speculation...

[gilpo]

Here's what I've found based on my research.

http://silverbearcafe.com/private/5.08/reversal.html

They concede that you can get paid in gold and silver at face value. ONLY US gold and silver. Foreign is considered a collectable and must be accounted for at market value. If you exchange the gold and silver for FRN's at market value, you have to pay capital gains taxes. However, by not having to pay out thousands in SS and Medicare taxes, the 15% capital gains is nothing. And, whatever you stack and don't 'sell', no taxes. Now if I could only talk my employer into going for it....

There is a risk though. In order to get around minimum wage, they either have to make up the difference between the gold face value and minimum wage with FRN's or they have to hire you as an independent contractor. Independent contractors aren't subject to minimum wage, required breaks and lunches etc. So you have no rights. If you work for a crooked employer, they could really screw you over.

[Mossy]

Pretty sure the IRS could reference a post like this and claim intent to defraud, no?

Or am I giving the IRS too much credit regarding the extent of their ability to uncover such electronic traces...Im not at all knowledgable on the subject, so just speculation...

They've seen every variation of this you want to name. And even if the law specifically allows something, it seldom applies to them if it means income for the Gov't. I'd not risk it.

[highroller4321]

I am not a lawyer so take this with a grain of salt.

I believe it is legal but once you sell the silver you have to claim it as income for the amount you sell it for. I would google it becuase there are some more stories out there. I believe there was a contractor who was paying his employees with silver eagles. The IRS didn't have a problem with that intill the employees didn't pay taxes on the silver they sold.