Are precious metals purchases subject to sales tax?
Precious metals purchases are not subject to sales tax in the state of Texas. However, some states do require the collection of sales-tax on precious metals delivered within their state. CLICK HERE for a list of precious metals sales-tax requirements in all 50 states.
When it comes time to sell my precious metals, will the sale be subject to capital gains tax?
Long-term and short-term capital gains tax questions fall under the class of topics for which you should consult an authorized tax professional. It is generally understood that profits derived from the sale of precious metals are subject to a capital gains tax of 28%. The reporting of those gains is subject to U.S. law and the conscience of each individual.
When I buy from Texas Precious Metals, does TPM report the sale to the U.S. government?
Unlike the banking industry, the precious metals industry is currently unregulated. Therefore, the sale of precious metals is a non-reportable event, provided you are not paying for your purchase with cash (physical dollars) in excess of $10,000 (which warrants the filing of Form 8300) or deemed to be involved in suspicious activity (SARS report).
The government is satisfied that the funds originating from your bank via personal check or bank wire have been pre-screened for suspicious activity because of the mandates presently enforced on banks. In other words, the government is convinced that your bank knows the origin of your funds and is conducting the proper due diligence on its clients. Consequently, precious metals dealers are not subject to additional reporting restrictions, no matter the size of the purchase.
Nevertheless, in our technological age, it would be naïve to assume that the government is not able to easily track the activity of any person of interest via the communications channels (phone, internet, etc.) leading to the purchase. The world is interconnected. Obviously, it is much more difficult for the government to track the whereabouts of the metal once purchased or the line of ownership once it is gifted, traded, lost, stolen, or otherwise dispensed of.
How do I know my metal is real?
There are two origins for the precious metals we sell: the mints, and third-party sellers such as clients or other dealers.
More than 85% of all the metal we sell originates from the sovereign or private mint producing the coin or bar. The mint guarantees the weight and purity of these products, and we sell them to our clients in the exact condition we receive them from the mint. We open sealed monster boxes or coin tubes only when orders of uneven increments oblige us to do so.
For orders originating from third-party sellers (clients or other dealers), we test every single product that enters our vault, no matter how large or small, using a combination of methods ranging from water density testing to X-ray fluorescence, among other methods.
I have heard that the government might confiscate gold again like they did in 1933. Is this true?
It is impossible to know whether or not the government will confiscate precious metals at a future time. However, there are three considerations for those anxious about the prospect:
The government can confiscate whatever it wants, whenever it wants, and has been known to seize land and other assets from citizens. In fact, the government presently confiscates a percentage of individual income through various taxes that could rise at any time. Gold is certainly not immune to governmental oversight and regulation.
It is worth noting that, in 1933, the government did reimburse citizens for their gold, albeit at an immediately discounted rate. Therefore, this form of “confiscation” was different than an airport toiletry confiscation by the TSA, for which there is no reimbursement.
Lastly, and perhaps most importantly, it is worth highlighting that the emphasis placed on the 1933 gold confiscation by some precious metals dealers is not without incentive. Certain dealers incentivize their sales force to drive profits. For example, since collectible coins offer higher margins, these opportunistic capitalists emphasize that the 1933 legislation exempted collectible coins. However, many of the products classified as collectibles today were standard bullion coins in 1933. So, the coins being promoted today were actually non-exempt at the time of legislation. In the event of future legislation, it is impossible to know what stipulations the government will place on the citizenry.
Is it better to purchase collectible coins or bullion coins?
Purchasing collectible coins is like purchasing a piece of art. Generally, the predominant value resides in the rarity, artistry, or desirability, not the metal. So, in evaluating collectible coins, it is vitally important to recognize that there are hefty premiums on these coins that sometimes far exceed the metallic value. If you desire collectible coins, ensure that your motivation is not for currency-like fungibility (i.e. easily and quickly convertible into an instrument of equal value).
How do I know I can trust Texas Precious Metals?
We strongly encourage first-time precious metals buyers to thoroughly research our company and others before purchasing. Read online reviews, assess Better Business Bureau complaints, or make a site visit to the company’s facility if feasible. The precious metals industry attracts the unscrupulous, so it is important to be diligent.