There is no limit on how much gold or silver you can buy or sell, but there may be a few reporting rules in larger transactions. Many questions arise about the amount of gold and silver a person can buy or sell before being reportable.
Those questions often address two totally different questions. The laws are written ambiguously, but the Industry Council for Tangible Assets has worked with IRS agents, Homeland Security, and regulating authorities to come up with acceptable rules or guidelines for the industry.
Dealing with a member of ICTA insures that your transactions are reported correctly, or when they are not necessary to be reported.
First is the cash reporting rule. The $10,000 rule has been in place for many years and is not subject to interpretation. A person using a cashiers check, personal check or bank wire can spend any amount desired without having to fill out form 8300 as long as the transaction does not involve cash or more than one monetary instrument.
If you are spending more than $10,000 in one transaction or a series of related transactions, it must be reported with a form 8300. This law applies to cash or any transaction where two or more payment forms are used.
Today other rules involve lesser amounts as well. With the advent of the Patriot Act, every company dealing with more than $50,000 a year in gold or silver must have an AML (anti-money laundering) plan in place. This is what the industry calls "the $3,000 rule." If a person is spending more than $3,000, the rule is that the dealer must know his customer.
Here is where the amount is not a rule set in stone, but rather a guideline that has been established by ICTA working with Homeland Security. What is important is that the company has an AML plan and that they follow it.
The second question is, "What is reportable to the IRS when a person sells?" This is another arena that does not have a set rule, but rather a guideline that ICTA has established.
If a person is selling more than 1,000 ounces of bullion silver, $1,000 face value in old U.S. silver coins, 25 ounces of non-U.S. gold bullion, or bars of gold larger than one kilo (32.15 ounces) the dealer must furnish the IRS with a 1099 capital gains form.
Of course, a person is only liable for the profit (or loss) they incurred in the sale. Amounts less than that are not required to be reported by the dealer, but is up to the consumer and their tax planner to decide how to handle the transaction.
It is important to have someone that can help you navigate through the reporting rules and provide the correct information on how to deal with the reports. By finding a knowledgeable dealer you can save your self a tax headache, or nightmare, down the road.
• Allen Rowe is the owner of Northern Nevada Coin in Carson City.