However, unlike gold bars, coins allow investors to sell in smaller increments, making them appealing both as collectors’ items and investments.
Sales of precious metals exceeding certain quantities require dealers to file IRS 1099B forms, including sales of bullion coins.
Many individuals still want to be able to sell their gold without alerting the IRS and some unscrupulous dealers take advantage of this by misinforming investors.
Are Gold Coin Sales Reportable to the IRS?
Precious metal dealers must report customer sales that involve significant cash sales to help the IRS track any potential money laundering schemes that might threaten to undermine our economy.
However, these rules don’t apply to all gold coin sales. For instance, all COMEX 1000-ounce silver bars must be reported but 1 oz gold Maple Leaf and Krugerrand coins don’t. 90% silver US coins must also be reported but American Gold Eagles do not qualify.
Reporting criteria is determined by the purity and quantity of each coin or bullion piece sold as well as any cash involved in its sale. For example, if a customer makes two purchases within 24 hours totaling $8,000 each time using cash payments only – dealers must record these as “related.” These requirements mirror bank’s Know Your Customer regulations when dealing with customers.
Are Gold Coin Sales Reportable to the IRS if Paid in Cash?
Many individuals do not want the government to know of their precious metal purchases as this could lead to their information being sold or used against them, which is an understandable concern.
When purchasing gold coins and bullion in cash, your dealer is required to report this transaction to the IRS using 1099-B forms, providing details like your name, address, citizenship status, social security number and an identifying mechanism.
Payment for gold coin sales using personal checks, debit, credit or bank transfers does not trigger these reporting requirements, leading many people to buy and sell precious metals using such noncash transactions.
There are numerous low premium bullion products that don’t trigger reporting requirements on sale, such as gold coins with fractional denominations; Gold or Silver American Eagle Coins; and pieces of foreign currency not specifically referenced by the IRS’ Reportable Items List from post-1980’s rundowns.
Are Gold Coin Sales Reportable to the IRS if Paid in Check?
While dealers may try to use talk of reporting as a pressure tactic to encourage customers to purchase their products, most gold coin sales that are paid with checks do not need to be reported to the IRS; however, they would like to know whether any coins sold fall under their Reportable Items List as well as how much cash was exchanged during each transaction – similar to how KYC laws must be followed in banks to prevent money laundering.
When precious metal dealers accept large payments in cash or its equivalent, they must fill out an 8300 form and report related transactions such as consecutive purchases within a short timeframe to the IRS. Doing this allows the agency to detect possible money laundering schemes which could harm the economy. For more information regarding these reporting requirements consult a tax professional.
Are Gold Coin Sales Reportable to the IRS if Paid in Bank Draft?
IRS requires dealers of gold coins to disclose any sales to prevent tax evasion, via Form 8300, outlining a dealer’s reporting duties for bullion sales.
For instance, when buying gold or silver coins from dealers with bank drafts, cashier’s checks, traveler’s checks, postal money orders or any other form of payment that could be considered cash equivalents such as traveler’s checks or cashier’s checks, any transaction over $10,000 must be reported to the IRS and reported accordingly.
However, certain bullion products do not fall under these regulations for reporting. Examples include Gold American Eagle Coins or any numismatic or semi-numismatic gold and silver coins created post 1980 when the IRS first created their Reportable Items List. We always advise customers to consult a tax professional regarding their specific reporting obligations.