Did you know in 1933, Franklin D. Roosevelt made it illegal for Americans to own or sell gold coins and bullion?
Let’s take a step back in history.
Roosevelt was elected president of the United States on a promise he would end the Great Depression. His method was to take America off the “gold standard”, or the system by which the value of currency was defined in terms of gold.
At the time, you could go to the bank and exchange your dollar bill for a dollar worth of gold. Try to do that today, and your bank teller will think you’re crazy.
Roosevelt did this to limit the amount of money printed by the government; all federal reserve notes (or paper money) had to be backed by 40 percent gold owned by the Federal Government.
He also issued Executive Order 6102 which made the ownership of gold coins and bars illegal — and punishable by up to ten years in prison. Makes sense why people buried their gold in the backyard, huh?
Unfortunately, the plan didn’t work. And in 1937, the stock market collapsed by 90 percent. If you want to dive into this history more, click here.
In 1974, President Gerald Ford (re) legalized gold ownership. While there are now no restrictions on the type or quantity of gold coins and bullion you can own, most people still want to protect their privacy.
As with most other businesses, the majority of precious metal transactions aren’t required to be reported. In fact, in the seven years, we’ve been in business, we’ve never had to report a transaction.
But, there are a few rare exceptions to that rule. And why not know them? We go over those instances below.
[Some legal stuff: We aren’t providing tax or legal advice. This is just some general information because many of our customers ask. We try to be accurate, but we’re experts in melting gold, not accounting or law. We can’t guarantee that all the information is accurate or covers every individual case. And we don’t assume any obligation to update this information in the future. Please, always consult with a CPA and/or attorney on tax or legal issues.]
FORM 1099-B
This form is for a broker or dealer to complete if you sell certain precious metal coins or bullion. It helps the IRS determine if you, the seller, have properly reported this income on your tax return. But, only a few items from the IRS’s reportable items list will trigger this form. For example, these gold, silver, and platinum bars:
FORM 8300 (PATRIOT ACT)
This form is only for the purchasing of coins and bullion (which is a service we don’t offer). A dealer would be required to report your purchase if your transaction is larger than $10,000 and you paid using actual cash (money order, cashier’s check, or traveler’s check included). This form would not be filed if you paid by personal check, debit, bank wire, or credit card.
INCOME TAX RETURN (TALK TO YOUR ACCOUNTANT)
Finally, when it comes to your personal tax returns, you have your own reporting obligations. You are, of course, urged to comply. Every state has its own rules and regulations so please talk to your accountant or visit the IRS website to learn more about what you’re required to report.
If you’re a visual learner, JM Bullion has an informative infographic about reporting to the IRS here.
We’re dedicated to maintaining your confidentiality when you sell your gold, silver, or platinum coins and bullion. But, we want you to feel confident that your transactions with us will be legal, secure, and discreet.
If you have any other questions regarding selling coins and bullion, give us a call (or talk to that accountant of yours).