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3 hours ago, bernorange said:

Also, it's possible for the gold/silver ratio to decline while both gold and silver continue going up (silver just goes up faster).  i wouldn't be shorting gold right now unless you had insider info from someone at the Fed.

Yes, I'm aware. It doesn't matter what causes the ratio to decline if you have an equal position in silver and a gold short - that's the point of the hedge. You will make your money back on your silver position if that's what is causing the ratio to decline.

I mean if I was playing the gold market I may or may not short it right now, but I also wouldn't buy a bunch of silver so it's a moot point. I was addressing someone that already owns a lot of silver. 

Thanks for the info on different ways people enter gold positions. I think what I was trying to recall is that many people are moving away from purchasing it physically because an index /ETF is much easier.

Edited by ztejas

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3 hours ago, bernorange said:

You will likely only have difficulty if you are trying to buy UTIMCO sized quantities. 

I would love for this to be a problem that I had.  

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I've been messing with it for less than a decade. Maybe there were shortages of physical metal before that, but the only shortage I've seen was during the shut-down, when silver dropped to 12 (real price to buy it was 20), then it reappeared when spot went back up to 17-18 (real price to buy still 20.)

Small shops will often have bottlenecks, usually it's not a drought so much as a selection based on what some dude sold them a couple days ago.

Internet is a mixed bag. eBay bidders drive prices up a fair amount over what it's worth, plus they'll tack on tax even if your state doesn't tax precious metals. I used to like Apmex, but they've got stoopid prices now. I keep coming back to Provident Metals.

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When the shit hits the fan and China detonates an EMP device or the NORKS, India, and Pakistan decide to start lobbing nukes around those ETFs, futures contracts, and shares in a vault aren't going to be worth anything  Physical metal stashed in your gun safe on the other hand might be..

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4 minutes ago, NeverMarryAStripper said:

When the shit hits the fan and China detonates an EMP device or the NORKS, India, and Pakistan decide to start lobbing nukes around those ETFs, futures contracts, and shares in a vault aren't going to be worth anything  Physical metal stashed in your gun safe on the other hand might be..

Boxes of ammo will do very well as a barter medium.

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21 minutes ago, NeverMarryAStripper said:

Physical metal stashed in your gun safe on the other hand might be..

Only if people decide it's worth something. Which, historically we have always decided of gold. 

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On 7/30/2020 at 7:54 PM, leaf said:

I bought 100 1 oz. silver rounds at the end on March for about $17.00 each.  I don't pay much attention to the market.  For those of you that do, do you think that silver will continue to go up?

Yes, silver will continue to move higher.  It's going to $50 an ounce....for starters.

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on one hand im kinda tempted to sell some of the metals ive got.  they were bought some year sback from provident, have now appreciated, and its basically non-reportable on taxes (?)

 

on the other hand, its simply nice to have around.  which is the real reason i bought them in the first...to fondle, not to profit

 

 

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2 minutes ago, 52-80 said:

on one hand im kinda tempted to sell some of the metals ive got.  they were bought some year sback from provident, have now appreciated, and its basically non-reportable on taxes (?)

 

on the other hand, its simply nice to have around.  which is the real reason i bought them in the first...to fondle, not to profit

What do you mean by “it’s basically non-reportable on taxes”?

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3 minutes ago, XYZ said:

What do you mean by “it’s basically non-reportable on taxes”?

IRS dont know when i bought it.  and if i sell to a dealer, pretty sure theyre not going to report that transaction (with my name) to the authorities either

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I believe a transaction over $10,000 is reportable to the IRS.  The first time I ordered gold from APMEX they sent a copy of what they reported to the IRS.  I have made sure to keep my future purchases under that amount since then.

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18 hours ago, Rusty Shackelford said:

I believe a transaction over $10,000 is reportable to the IRS.  The first time I ordered gold from APMEX they sent a copy of what they reported to the IRS.  I have made sure to keep my future purchases under that amount since then.

Send me your address so I can check that you safe is properly installed.

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If gold pops the way some outlandish predictions expect, it's going to be hard to sell an ounce or two without a Form 8300 reporting requirement.  Smaller sized units carry larger premiums, but might be worth it down the road...

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12 minutes ago, bernorange said:

If gold pops the way some outlandish predictions expect, it's going to be hard to sell an ounce or two without a Form 8300 reporting requirement.  Smaller sized units carry larger premiums, but might be worth it down the road...

Good point, but how would they know your "cost basis" for the gold you sold, if you didn't have to report it when it was bought? 

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1 minute ago, Rusty Shackelford said:

Good point, but how would they know your "cost basis" for the gold you sold, if you didn't have to report it when it was bought? 

honor system, bro

 

i bought some from foreign mints, and also received as gifts... value = 0.01$

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As I understand it (I'm not a tax expert), you can claim a best estimate (with some documentation to make the estimate reasonable).  For example, averaging the price points across a range of time over which it was likely that the item(s) were bought.

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28 minutes ago, Rusty Shackelford said:

Good point, but how would they know your "cost basis" for the gold you sold, if you didn't have to report it when it was bought? 

They don’t *know* anything but what is reported to them. In this case it would be a number on a form filled in by you as part of your tax return. The problem is if they decide to audit you, then they will want proof

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1 hour ago, Rusty Shackelford said:

Wouldn't you would want to claim a higher cost basis, to report it as a loss?

whoops.  i meant $five brillion dollars

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1 hour ago, Rusty Shackelford said:

Good point, but how would they know your "cost basis" for the gold you sold, if you didn't have to report it when it was bought? 

I mean, how did you buy it?

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I think most peeps here know that I am a "gold bug".  I read a lot about gold.  There are lots of crazy predictions about where gold may be headed and I don't really give them much attention.  But this morning I ran across an article (from a well known gold advocate) that drew some conclusions based upon trading data from the COMEX and LBMA that is more extreme than the $15K gold price predictions I have been seeing.  It's a tl;dr bit, and not really the kind of thing you can just quote little snippets from.  Details and context are important, so for those interested:

https://www.goldmoney.com/research/goldmoney-insights/gold-at-2k-so-why-the-fuss

My best effort to summarize is this:  Bullion banks hold record short positions in COMEX and hedge with long positions on the LBMA.  Physical gold trading is endangering the LBMA long positions (as in - there is insufficient physical gold to deliver against them) so banks will be hung out to dry on their COMEX short positions (LBMA hedge positions are vapor).  It could set up the mother of all short squeezes.

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My best effort to summarize is this:  Bullion banks hold record short positions in COMEX and hedge with long positions on the LBMA.  Physical gold trading is endangering the LBMA long positions (as in - there is insufficient physical gold to deliver against them) so banks will be hung out to dry on their COMEX short positions (LBMA hedge positions are vapor).  It could set up the mother of all short squeezes.

Gee, thanks for summarizing this. I still didn’t understand much. I know bullion. I’ve got both chicken and beef.

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12 hours ago, tomahawk dunk said:

@bernorange what price do you see gold going to in the near future? Also, where would you sell any gold jewelry, etc? I sold some recently to Midwest Refineries in Michigan but would like to hear other opinions. Thanks!

I don't do crystal balls.  The price will go up and down and not necessarily in that order.  Long term, I expect the price will push higher.

I have never tried to sell gold jewelry.  I would expect selling directly to a refiner for melt would be better than selling to a middleman who then sells to a refiner.

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On 8/6/2020 at 12:54 PM, XYZ said:

They don’t *know* anything but what is reported to them. In this case it would be a number on a form filled in by you as part of your tax return. The problem is if they decide to audit you, then they will want proof

And what if you really have no idea what your cost base is, what would be required as proof from the IRS?  Say a person was gifted some gold coins from a family member 2-3 years ago.

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Do you have any idea when they bought?  If you have a general idea, you can look at historical prices and come up with some type of defensible valuation.  If they are passed, you'll have to make assumptions.  I would tend to be more conservative and claim a basis at the lower end of the range, but that's me.

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One thing to keep in mind with estimating a basis is that dealer prices for physical coins have premiums over spot, so taking an average spot price from a date range on a historical price chart will likely be low if you don't include a reasonable dealer premium (and/or sales tax depending upon where and when they were likely acquired).  $.02

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1 hour ago, bernorange said:

One thing to keep in mind with estimating a basis is that dealer prices for physical coins have premiums over spot, so taking an average spot price from a date range on a historical price chart will likely be low if you don't include a reasonable dealer premium (and/or sales tax depending upon where and when they were likely acquired).  $.02

I think the premium I paid in 2009 was about $50/coin just for info

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2 hours ago, Druggist said:

And what if you really have no idea what your cost base is, what would be required as proof from the IRS?  Say a person was gifted some gold coins from a family member 2-3 years ago.

 

2 hours ago, Catpfish said:

Do you have any idea when they bought?  If you have a general idea, you can look at historical prices and come up with some type of defensible valuation.  If they are passed, you'll have to make assumptions.  I would tend to be more conservative and claim a basis at the lower end of the range, but that's me.

If they were gifted it doesn't matter what price they were purchased at. I beleive (and someone with more knowledge of federal tax can correct me) your cost basis is zero in this scenario so you would/should pay a 28% collectibles capital gains tax on the full amount of the sale. 

Either that or you would pay tax based on the value of the coins when you received them.

I beleive the former example would be correct here, but either way, what was originally paid for the coins doesn't matter.

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I believe the basis would be the basis that the giver had.  I know that is the way that land is done, and why it's almost always a bad idea to gift land instead of letting it pass through the estate.  Passing assets through the estate allows for a stepped up basis...the value at the time of death.

Edited by Catpfish
clarification

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Property Received as a Gift

To figure the basis of property you receive as a gift, you must know its adjusted basis (defined earlier) to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it.

 

FMV Less Than Donor's Adjusted Basis

If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustment to basis while you held the property. Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustment to basis while you held the property (see Adjusted Basis , earlier).

If you use the donor's adjusted basis for figuring a gain and get a loss, and then use the FMV for figuring a loss and have a gain, you have neither gain nor loss on the sale or disposition of the property.

Example.

You received an acre of land as a gift. At the time of the gift, the land had an FMV of $8,000. The donor's adjusted basis was $10,000. After you received the land, no events occurred to increase or decrease your basis. If you sell the land for $12,000, you'll have a $2,000 gain because you must use the donor's adjusted basis ($10,000) at the time of the gift as your basis to figure gain. If you sell the land for $7,000, you'll have a $1,000 loss because you must use the FMV ($8,000) at the time of the gift as your basis to figure a loss.

If the sales price is between $8,000 and $10,000, you have neither gain nor loss. For instance, if the sales price was $9,000 and you tried to figure a gain using the donor's adjusted basis ($10,000), you would get a $1,000 loss. If you then tried to figure a loss using the FMV ($8,000), you would get a $1,000 gain.

Business property.

 

If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deduction is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property.

 

FMV Equal to or More Than Donor's Adjusted Basis

If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. Increase your basis by all or part of any gift tax paid, depending on the date of the gift.

Also, for figuring gain or loss from a sale or other disposition of the property, or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis by any required adjustments to basis while you held the property. See Adjusted Basis , earlier.

Gift received before 1977.

 

If you received a gift before 1977, increase your basis in the gift (the donor's adjusted basis) by any gift tax paid on it. However, don't increase your basis above the FMV of the gift at the time it was given to you.

Example 1.

You were given a house in 1976 with an FMV of $21,000. The donor's adjusted basis was $20,000. The donor paid a gift tax of $500. Your basis is $20,500, the donor's adjusted basis plus the gift tax paid.

Example 2.

If, in Example 1 , the gift tax paid had been $1,500, your basis would be $21,000. This is the donor's adjusted basis plus the gift tax paid, limited to the FMV of the house at the time you received the gift.

Gift received after 1976.

 

If you received a gift after 1976, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it that is due to the net increase in value of the gift. Figure the increase by multiplying the gift tax paid by a fraction. The numerator of the fraction is the net increase in value of the gift, and the denominator is the amount of the gift.

The net increase in value of the gift is the FMV of the gift less the donor's adjusted basis. The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. For information on the gift tax, see Pub. 559, Survivors, Executors, and Administrators.

Example.

In 2018, you received a gift of property from your mother that had an FMV of $50,000. Her adjusted basis was $20,000. The amount of the gift for gift tax purposes was $35,000 ($50,000 minus the $15,000 annual exclusion). She paid a gift tax of $7,100. Your basis, $26,106, is figured as follows:

Fair market value $50,000
Minus: Adjusted basis 20,000
Net increase in value $30,000
Gift tax paid $7,100
Multiplied by ($30,000 ÷ $35,000) 0.86
Gift tax due to net increase in value $6,106
Adjusted basis of property to your mother 20,000
Your basis in the property $26,106

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A 'friend' needs hundreds of gold and silver coins apprised and sold.  These are "standing liberty" 20 dollar gold coins from 1900-1920's as well as Mexican gold coins.  This is all being done legitimately through a family corporation and needs to be professionally inventoried, valued, and sold.  They need three independent appraisals to satisfy family shareholders.  Does anyone know how to go about this?  This doesn't sound like something you do at the local pawn shop.  Thanks.

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4 hours ago, BottleRocket said:

... Does anyone know how to go about this?  This doesn't sound like something you do at the local pawn shop.  Thanks.

You need to take them to a coin dealer (specializing in numismatic coins and gold/silver bullion).  What city? I might be able to suggest one or two.  PM if you prefer.

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