Gold taxation thoughts

Discussion of the Gold portion of the Permanent Portfolio

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Mr Vacuum
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Re: Gold taxation thoughts

Post by Mr Vacuum » Thu Mar 01, 2018 7:28 pm

sophie wrote:I can confirm that the wash sale rules don't apply. I researched IRS rules, then tax loss harvested gold Eagles through APMEX in 2013. Per the guy I talked to on the phone, they were doing a ton of those transactions at the time. I had to mail them coins and get them mailed right back though.
Thanks for confirming, sophie. Good deal.

My personal long run expectation for gold is effectively the fed’s inflation target, so I’m not concerned holding most of the allocation in my SEP IRA via Fidelity, but the ability to tax loss harvest that volatile stinker occasionally sure is enticing and may merit some shuffling eventually.
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ochotona
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Re: Gold taxation thoughts

Post by ochotona » Sat Mar 03, 2018 10:28 am

Tech, can you really transfer one physical gold IRA to a different custodian without having to liquidate?

Here is my Yelp review of Goldstar Trust.

https://www.yelp.com/biz/goldstar-trust ... y-amarillo
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Kriegsspiel
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Re: Gold taxation thoughts

Post by Kriegsspiel » Sat Mar 03, 2018 10:32 am

I've heard boating accidents are the #1 liquidator of gold in taxable accounts.
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ochotona
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Re: Gold taxation thoughts

Post by ochotona » Sat Mar 03, 2018 10:43 am

Kriegsspiel wrote:I've heard boating accidents are the #1 liquidator of gold in taxable accounts.
I had one of those. Dang, I felt so bad.
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Kriegsspiel
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Re: Gold taxation thoughts

Post by Kriegsspiel » Sat Mar 03, 2018 11:18 am

Fuck safe deposit boxes, my gold's in Davy Jones' Locker!
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technovelist
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Re: Gold taxation thoughts

Post by technovelist » Sun Mar 04, 2018 7:25 am

ochotona wrote:Tech, can you really transfer one physical gold IRA to a different custodian without having to liquidate?
I have no idea, although I don't know why that would be impossible in theory. What I liquidated was a Swiss franc annuity in a profit sharing plan.
That should have been easy but wasn't because the insurance company was totally incompetent at sending me the money even though they were already using almost identical instructions to pay my mother's annuity every quarter.
I'm still waiting for Fidelity to transfer the money from my profit sharing account to my rollover IRA, because for some reason that can't be done online. :(
ochotona wrote: Here is my Yelp review of Goldstar Trust.

https://www.yelp.com/biz/goldstar-trust ... y-amarillo
Nice! I have found them very good so far, but they are waiting for Fidelity to have the money in the right account before funding.
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technovelist
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Re: Gold taxation thoughts

Post by technovelist » Wed Mar 07, 2018 7:08 pm

technovelist wrote:
ochotona wrote:Tech, can you really transfer one physical gold IRA to a different custodian without having to liquidate?
I have no idea, although I don't know why that would be impossible in theory. What I liquidated was a Swiss franc annuity in a profit sharing plan.
That should have been easy but wasn't because the insurance company was totally incompetent at sending me the money even though they were already using almost identical instructions to pay my mother's annuity every quarter.
I'm still waiting for Fidelity to transfer the money from my profit sharing account to my rollover IRA, because for some reason that can't be done online. :(
ochotona wrote: Here is my Yelp review of Goldstar Trust.

https://www.yelp.com/biz/goldstar-trust ... y-amarillo
Nice! I have found them very good so far, but they are waiting for Fidelity to have the money in the right account before funding.
Ok, Fidelity has transferred part of the money and they have gotten it, so I've ordered some gold from my dealer to go into the IRA.

Interestingly enough, the premium for proof Eagles is pretty low, about 2.5%, whereas usually it's more like 15% at the bid, according to the dealer. He said he was paying $200 over gold for proofs just last year. So that's what I bought, and will continue to buy as long as they have such a low premium. How much lower can it go? Probably not much, but it can go a lot higher.
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technovelist
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Re: Gold taxation thoughts

Post by technovelist » Sat Mar 17, 2018 3:24 pm

technovelist wrote:
technovelist wrote:
ochotona wrote:Tech, can you really transfer one physical gold IRA to a different custodian without having to liquidate?
I have no idea, although I don't know why that would be impossible in theory. What I liquidated was a Swiss franc annuity in a profit sharing plan.
That should have been easy but wasn't because the insurance company was totally incompetent at sending me the money even though they were already using almost identical instructions to pay my mother's annuity every quarter.
I'm still waiting for Fidelity to transfer the money from my profit sharing account to my rollover IRA, because for some reason that can't be done online. :(
ochotona wrote: Here is my Yelp review of Goldstar Trust.

https://www.yelp.com/biz/goldstar-trust ... y-amarillo
Nice! I have found them very good so far, but they are waiting for Fidelity to have the money in the right account before funding.
Ok, Fidelity has transferred part of the money and they have gotten it, so I've ordered some gold from my dealer to go into the IRA.

Interestingly enough, the premium for proof Eagles is pretty low, about 2.5%, whereas usually it's more like 15% at the bid, according to the dealer. He said he was paying $200 over gold for proofs just last year. So that's what I bought, and will continue to buy as long as they have such a low premium. How much lower can it go? Probably not much, but it can go a lot higher.
The first gold purchase is now showing up in my Gold Star Trust IRA. The dealer told me that the proofs I bought were probably already in the Delaware depository, so they shouldn't take too long to show up, and it looks as though he was right.
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ochotona
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Re: Gold taxation thoughts

Post by ochotona » Wed Nov 27, 2019 5:11 pm

You can donate any appreciated security to a Donor Advised Fund. This lets you avoid cap gains tax and get a current year tax deduction. Then you can write checks to any charity at any time. I heard a good podcast from Schwab Charitable today. Good way to get rid of gold ETF shares.
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ochotona
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Re: Gold taxation thoughts

Post by ochotona » Wed Dec 04, 2019 7:16 pm

Yes, you can donate physical gold to a Donor Advised Fund run by Schwab Charitable. What happens is you make the donation ($50,000 to open the account), and you can get (1) the current year tax deduction and (2) then you disappear your collectibles tax gains problem. Then, they give you cash credit for the gold, which you can invest in a variety of conventional portfolios, and you can make donations to charities (only charities... you lose the ability to do anything else with the money, and it's irrevocable).

I paid $12,500 for a 10 oz gold bar. Well let's say in a number of years gold does take the rocket ship in dollar terms, and it's $50,000, and I hit a rebalancing band. I can push it into a Donor Advised Fund, get these tax benefits, and then I'll be able to make charitable contributions. I anticipate donating more than $50,000 to charity over the span of my life; that's not hard to do at all.

There is a 2.4% fee for handling and assessing the gold. This is where ETF would be much easier. But the tax benefits are much larger than the fee.

This concept works with any appreciated asset.

If you are interested, contact:

Manager, Charitable Strategies | Schwab Charitable
Tel (720) 418-4789
9800 Schwab Way, Lone Tree, CO 80124
www.schwabcharitable.org
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vnatale
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Re: Gold taxation thoughts

Post by vnatale » Wed Dec 04, 2019 7:54 pm

ochotona wrote:
Wed Dec 04, 2019 7:16 pm
Yes, you can donate physical gold to a Donor Advised Fund run by Schwab Charitable. What happens is you make the donation ($50,000 to open the account), and you can get (1) the current year tax deduction and (2) then you disappear your collectibles tax gains problem. Then, they give you cash credit for the gold, which you can invest in a variety of conventional portfolios, and you can make donations to charities (only charities... you lose the ability to do anything else with the money, and it's irrevocable).

I paid $12,500 for a 10 oz gold bar. Well let's say in a number of years gold does take the rocket ship in dollar terms, and it's $50,000, and I hit a rebalancing band. I can push it into a Donor Advised Fund, get these tax benefits, and then I'll be able to make charitable contributions. I anticipate donating more than $50,000 to charity over the span of my life; that's not hard to do at all.

There is a 2.4% fee for handling and assessing the gold. This is where ETF would be much easier. But the tax benefits are much larger than the fee.

This concept works with any appreciated asset.

If you are interested, contact:

Manager, Charitable Strategies | Schwab Charitable
Tel (720) 418-4789
9800 Schwab Way, Lone Tree, CO 80124
www.schwabcharitable.org
One thing to watch out regarding your $50,000 example is the following....there are either 30% or 50% of adjusted gross income limitations involved for taking a current year deduction for charitable contributions.

https://www.irs.gov/publications/p526#e ... k100017757

"Limits based on 50% of adjusted gross income

There are two 50% limits that may apply to your contributions.

Noncash contributions to 50% limit organizations. If you make noncash contributions to organizations described earlier under First category of qualified organizations (50% limit organizations) , your deduction for the noncash contributions is limited to 50% of your adjusted gross income minus your cash contributions subject to the 60% limit.

Capital gain property exception. A 30% limit applies to noncash contributions of capital gain property if you figure your deduction using fair market value without reduction for appreciation. See Certain capital gain property contributions to 50% limit organizations , later, under Limits based on 30% of adjusted gross income, for more information."

Whatever you have contributed in excess of whichever limitation applied gets carried over to the next year (and even the next if you again run into limitation issues). That can be okay if you are itemizing every year. But you may end up getting the benefit the year of the contribution but not in the carryover year because it along with your itemized deductions are still lower than the standard deduction.

It's even worse for someone like me who every other year does all my payments - state taxes, real estate taxes, contributions - that constitute itemized deductions while doing NONE of them in the off year so I take FULL advantage of the standard deduction (getting a big deduction for not spending a cent).

If some of my contributions gets pushed into that next year, it's valueless to me. I've had to carefully make my contributions to avoid that from happening.

Vinny
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sophie
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Re: Gold taxation thoughts

Post by sophie » Thu Dec 05, 2019 8:30 am

Actually Vinny, there's no problem at all if ochotona sends the money to a donor advised fund.

DAFs are really nice, as they separate the decisions of how much & when to set aside for charity to which organizations & how much each to favor. Basically since discovering those I will never donate by check again. It'll always be highly appreciated shares. I simply then buy back the same # of shares with the money set aside for charity. Then I get the charitable deduction on the full amount (since I already itemize) AND avoid capital gains tax on the appreciated portion of the donated shares.

The math, for me, works out to a total tax savings of 60% of the donated amount, assuming the shares have appreciated exactly 100%. In other words, a charitable donation of $100 actually costs me only $40. Crazy!

I bet there are people who are quietly managing to figure out a way to game this system to their taxation advantage. Something like creating a charity and then funneling money back to themselves for administrative expenses. I'm sure that's illegal but you can see how great the temptation is.
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