Additionally what a lot of people get confused about is the $10,000 reportable transaction amount and what qualifies as cash.
First off, the $10,000 is when the mandatory reportable transaction is triggered. That doesn't mean that custodial entities, banks, etc. don't report transaction that are less that 10K. Banks and credit unions do it all the time to CYA "unusual" transactions, etc.
Furthermore:
What Counts as “Cash”?
For reporting purposes, “cash” includes:
- U.S. or foreign currency
- Cashier’s checks
- Money orders
- Bank drafts
- Traveler’s checks
However, there is a key nuance. If those cash instruments are $10,000 or less individually, and their
combined total exceeds $10,000, they qualify as reportable cash. So they can add transactions together over time to create the reportable transaction.
IRS Form 8300 applies when you pay cash whereas Form 1099-B applies when you sell certain metals back to a dealer.
Unlike Form 8300,
1099-B reporting depends on product type, purity, and quantity, not simply dollar value.
Reportable Gold Sales
Historically, dealers reported:
- 1 oz Gold Maple Leaf coins (25 coins or more)
- 1 oz Gold Krugerrands (25 coins or more)
- 1 oz Gold Mexican Onza/Libertads (25 coins or more)
- Gold bars totaling 1 kilo (32.15 troy ounces) or more
- Gold bars with a minimum fineness of .995
However, industry interpretation continues to evolve. Some dealers now interpret updated guidance differently for certain gold coins. Others take a conservative approach and continue traditional reporting standards.
Silver has its own reportable thresholds as does palladium and platinum. They're all different. And there are some exceptions ... possibly, depending on what standards the seller/buyer/business is using.
That said, reportable transactions and taxation are not the same thing. At all.
The IRS taxes profits, not transactions.
If you sell gold or silver at a gain, you owe capital gains tax on the difference between:
- Your cost basis
- And your sale price
If you sell at a loss, no capital gain applies.
Cost basis becomes especially important in inherited or gifted metals. Generally:
- For gifts, the value on the date of receipt establishes basis
- For inherited metals, the date of passing typically sets the stepped-up basis
Because every situation differs, investors should maintain purchase receipts and documentation.
Also, rules change all the time. For instance, Geographic Targeting Orders in select Southwest border ZIP codes temporarily required reporting as low as $1,000.
Like I've said more than a few times. Whoever wants to hold PMs should have that right. But just like with fiat or anything else, know the reporting requirements, tax implications, and understand those requirements are constantly changing. I think digital-only monetary processes is what will eventually be put in place and replace most physical currencies ... fiat or PMs or anything else for that matter. And I don't think confiscation is realistic, they'll simply mandate, rule, fee, and tax things to death that aren't in the digital process. Sucks, but there is too much current evidence that shows things are heading that way.
