Tax Advice for Gold Investment – Think Before You Invest

It is no doubt that gold is a luxurious kind of investment, but come to think of it, its luxury can you lead you to a wealthy lifestyle. Investing in gold is surely an excellent business opportunity. While some businesses are too risky to engage with, gold is an absolute win-win scenario. You will never lose what you have invested. Thus, no matter how erratic the economy is, still you are at a winning end. Your money will never be put to waste. The reason why gold is valued this much is that there is a scarce resource for this precious metal. Investing in gold is more secured because its value does not depreciate, unlike currencies. So is it worth it? Definitely! However, before you start investing with the first gold dealer you meet, you should first understand some tax advice for gold investment. Most gold dealers say that gold is exempted from tax. This is completely untrue. Read on to get more information on gold investments.

You must always consider gold, not just a form of investment, but an instrument that represents money. Buying gold is not like buying a tangible object that loses its value when consumed. Gold is equal to money and its value does not depreciate. Therefore, gold purchase is like money saving in the long run.

Current Gold Tax Rules

The current tax rules for selling gold in the United States should be understood by individuals and companies who are planning to invest in gold. If necessary, consult a financial planner to explain the mechanics to you and to guide you with regards to your investment plans. Gold is classified as a “collectible” according to the Internal Revenue Service or IRS. This is why this precious metal incurs a tax rate of 28%. This is applied to gold no matter what form it is. It is also applied to other precious metals such as silver, palladium, and platinum.

Specifically, the rules with regards to gold tax are designated to all types and forms of gold bullion coins. This also includes those rare coins collected by numismatics. It is designated to other precious metals such as those mentioned earlier, no matter what weight and regardless of where it is held (i.e. home or banks). Tax is also designated to gold wafers and gold certificates, as well as pool gold, rounds, and those commemorative coins.

Although the current regulation does not require buyers to report the sale of gold, it is the seller’s obligation to report the gain you got from the sale and pay 28% of what you have gained. This is one important tax advice for gold investment. It may seem alright not to report any sale you have made with your gold investment, however, IRS has a method to track unreported sales. How would IRS know? All gold dealers are obligated to report any unreported sales from sellers due to the Patriot Act. Never underestimate this because it may lead to imprisonment. Hence, gold dealers shall be suspended, or worse be terminated from their business, once they are caught with any illegal activity.

To Invest or Not To Invest

This tax information and tax advice for gold investment is stated not to scare off interested investors but to make them aware of the real deal. Buying and selling gold is a type of transaction. Every transaction comes with rules and regulations. Ask a financial planner about everything with regards to taxes to ensure that you are on the legal side. It is indeed an assurance and a form of security on the part of the seller and buyer to know about the current tax designation with regards to other precious metals. This will save time, effort, and a great deal of money for both parties to be knowledgeable about these types of taxes. Remember that the success of a gold investor lies on his knowledge about investing in gold.


Silver Investment – Is It a Lucrative Entry Point for a Good Investment?

Most of the investors give preference to silver after gold while planning for commodity investment. The reason for this is that there are numerous other benefits of silver apart from being an investment. At the same time like in other investments, the silver investment does have some risks. But as it is considered as tangible commodity, investors find it as a sensible investment and divide some of their finances for investing in this white metal. Further, it costs much less than gold and its value increases concurrently with gold. However, the investors with an interest or pondering to invest in it have to be cautious while making decisions. Knowing all the merits and de-merits of investing in it, identifying various kinds of investing methods, monitoring its prices are some good ideas for investors to find their investment requirements.

Know the merits and demerits of investing in silver

Similar to other types of investments, the idea of trading or investing in silver have some merits as well as de-merits. Initially, let’s know the merits of investing in it. Being a versatile metal, it is not affected by currency devaluation. So any change in the currency value has reverse effects on silver value. That is, if currency value decreases then its value increases. It is cheaper than gold, and it is good idea for investors with relatively little amount of money at disposal, to invest in it. During the times of economic downturn, silver can be beneficial in exchanging for currency. Furthermore, the usage of silver in metallurgical industry, electronics, computers and drug industry makes it a lucrative investment idea. On the other side, it is subjected to price changes like any other commodity and cannot be beneficial if the investment is not intended for longtime. Another drawback is the rate of return, which is not very good for silver investment when compared to other commodities. Moreover to exchange it for other items, the investor has to first convert it to currency. Finally, any precious item has the risk of getting stolen, so also with silver.

Different ways to investment in silver

Buying its physical form such as silver bullion bars, coins and rounds is a fundamental form of investing. It is easily available for purchase in different ranges starting from 10 to 1000 ounces and can be bought online or from the silver dealers. For investors who prefer short term investments, there is an option of Silver Exchange Traded Funds available. ETFs allow investors to do silver trading in the form of silver funds or stocks, and also for keeping track of the silver prices. However, depending on the needs suitable methods can be selected by the investor.