Turn your Gold and Silver Losses into a Tax Advantage

2015 Tax Strategies

As we approach the end of 2015, I believe there is an extraordinary opportunity to take advantage of this year’s drop in gold & silver prices. Let me explain how you can turn your precious metal holdings into an Asset.

A) Offset any 2015 capital gains you may have made on other investments (i.e., real estate, equities, bonds, etc.), by taking a capital loss on your gold/silver holdings. You can do this without losing your gold/silver investment by selling your gold/silver bullion coins at today’s low price and replacing them immediately with other popular low premium gold/silver bullion coins at current low prices.

B) Take your capital loss on your gold/silver holdings and use it against any gains in 2016 or beyond. If you don’t have any gains to offset the loss, you can utilize $3,000 per year against ordinary income. At the same time you lower your cost basis on your gold/silver holdings. Just as in scenario A above, you can do this without losing your gold/silver investment by selling your gold/silver bullion coins at today’s low price and replacing them immediately with other popular low premium gold/silver bullion coins at current low prices.

Eight reasons why you benefit from this tax strategy:

You can get an immediate tax savings on your 2015 tax return.
Take a capital loss this year and use it to offset future gains.
You use the funds to purchase low premium, pre-1933 U.S. and European gold coins, and Brilliant Uncirculated U.S. Silver Dollars or Eagles.
Premiums on pre-1933 U.S. & European gold coins are extremely low, due to the strength of the U.S. Dollar versus the Euro.
Low premium pre-1933 U.S. & European gold coins are popular due to their excellent liquidity.
Pre-1933 U.S. & European gold coins and U.S. Uncirculated Silver Dollars offer more privacy than newly minted bullion gold coins.
Gold, silver and other physical metals (along with stamps, artworks and antiques) are classified by the IRS as “collectibles”.
The ’wash sale’ rules, that prevent you from taking a loss and then immediately repurchasing a security, do not apply to collectibles. Therefore you can a take a loss and then repurchase the coins immediately.

The following is an example of how this strategy can turn your financial loss into an asset: Say you have a $40,000 profit in real estate or stocks/bonds. You also have 100 1oz Gold Eagles which you purchased at $1,500 per ounce in 2013. You can sell the 100 Gold Eagles at today’s gold prices for $110,000. You then have a $40,000 tax loss to offset the $40,000 real estate profit, and you have freed up $110,000. You can then buy $110,000 of popular gold investment coins to replace those you sold, and lower your cost base at the same time. If you didn’t have a $40,000 profit in 2015, you can roll the $40,000 capital loss into 2016, or utilize the loss at $3,000 a year.

What are my recommendations for physical gold and silver investment products right now? Pre-1933 European and U.S. $20 gold coins, and Brilliant Uncirculated 20-coin rolls of American Silver Dollars dated prior to 1924.

With the U.S. Dollar at a seven year high, many popular gold bullion coins are trading at a very low premium. In 2008, the Euro was worth $1.58, today the Euro is worth $1.04. That means the U.S. Dollar has appreciated 54% versus the Euro. The premium over spot gold on popular European gold coins are trading at record lows, when priced in U.S. Dollars.

Brilliant Uncirculated U.S. $20 Gold Saint Gaudens were trading at $2,205 on Dec 1, 2012 when gold was trading at $1,712 per ounce, a 28.8% premium. Due to the strength of the U.S. Dollar, the premium on the same U.S. $20 Gold Saint Gaudens is ½ that of 3 years ago. What a great value and unbelievable opportunity.

If you already own pre-1933 European gold, you can trade for U.S. pre-1933 $20 gold coins at the current low premiums, or vice-versa, if you own U.S. $20 gold coins you can trade for pre-1933 European gold coins.

The above is tax advice and I am not an accountant, so I recommend you confirm this information with your own accountant. If you don’t have an accountant who understands off-setting tax losses in precious metals, let me make a recommendation.

Edward Wenzel is a partner in the Woodland Hills, California accounting firm of Rivin Wenzel & Company, and a personal friend of mine for the past 15 years. Ed is highly respected within the accounting community, he is knowledgeable, and is a believer in the ownership of precious metals. He has recommended clients to me and I have also recommended clients to him, and I have received only positive feedback. Edward can be contacted by calling him at 818-348-1040 or by email: [email protected].

I believe the timing to take your precious metal tax loss in 2015 is perfect. Why? I think that by the end of 2015 we will have seen the end of the four year down cycle in the price of gold and a new up cycle will start, so your opportunity to offset your capital gains with losses is very timely. Please call or email David Stuppler or myself with any questions.

Sincerely,

Barry Stuppler
President
Mint State Gold by Stuppler
[email protected]
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MintStateGold.com
888-454-0444