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Foreign Precious Metals Account? - Ask TaxGuru
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Old 02-06-2013, 05:46 PM
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Foreign Precious Metals Account?

I have a Swiss precious metals account now worth about 20K ... In 2012 I sold 4K ... Does anyone know how I report this to the IRS on my tax return? ... Do I have to fill out a special form, or do I just report it as a 1099B (even though GoldMoney Inc don't send out a 1099B)? ... Thanks

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Old 02-07-2013, 02:53 AM
Join Date: Oct 2010
Posts: 5,245
“I have a Swiss precious metals account now worth about 20K ... In 2012 I sold 4K ... Does anyone know how I report this to the IRS on my tax return? ... “===============>precious metal gains are reported a little differently than other investments. They fall under a 28% tax rule rather than the normal capital gains rule. Considered collectables. Indeed many people do not report them if it was a cash transaction and untracable.Unfortunately, neither the IRS nor the U.S. Treasury has provided direct guidance on how to report precious metals held offshore. Precious metals reporting laws are complex. The U.S. government demands that dealers and investors divest themselves of all contacts in this industry that might use metals as a form of money laundering. They must report dealings in precious metals only if the transaction is in cash. Dealers should report all precious metal transactions over $10K on the IRS 8300 form. One need not file either 8300 form if a dealer or investor makes under $10K. A broker must file Form 1099-Bfor each personfor whom the broker has sold (including short sales) stocks, bonds, commodities, regulated futures contracts, foreign currency contracts (pursuant to a forward contract or regulated futures contract), forward contracts, debt instruments, etc., for cash.
The IRS closely monitors all dealers or investors with strong and regular foreign contacts. U.S. citizens and residents have an annual obligation to report the existence of all “foreign bank, securities or ‘other’ financial accounts” if the aggregate value of those accounts exceeded US$10K at any time during the preceding year. Those failing to do so face a fine up to US$250k, imprisonment up to five years, or both. The report, which the Treasury Department cleverly calls Form TD F 90-22.1, is due by June 30 of the following year. Thus, you must file this form by June 30, 2013, if you had any reportable foreign account relationships anytime in 2012.You have a separate obligation to disclose any “reportable” foreign accounts on Sche B of Form 1040. Hopefully, you already made that acknowledgment when you filed your 2011 tax return. If not, you should file an amended return and make the required disclosure (check “yes” on line 7a of SchB).The Treasury Department and the IRS construe the term “financial account” very broadly. The definition unquestionably includes bank, securities, and other accounts that hold financial instruments. However, it does not include individual bonds or stock certificates. This is an important distinction. If you have a foreign brokerage account that contains stock, this is a foreign financial account. If you hold individual shares of the stock directly, it is not reportable.By analogy, the same rules would presumably apply to gold or other precious metals held offshore. If you hold the metals in a safety deposit box or private vault, without opening a bank or other financial account, you don’t appear to have any reporting obligation. (However, at many foreign banks, you must open an account in order to rent a safety deposit box.) On the other hand, if you purchase the metals through a foreign bank account and the bank stores the metals in its vault as part of your account holdings, the relationship would be reportable.

“Do I have to fill out a special form, or do I just report it as a 1099B (even though GoldMoney Inc don't send out a 1099B)?”========> correct; If you perform any transactions involving securities, you'll receive a Form 1099-B in the mail to help you prepare your tax return. They must be sent by brokerages by Feb. 1 of the next year (for example, 2012 transactions must be sent by Feb. 1, 2013).
Form 1099-B is used to report money received from the sale of stocks, bonds or mutual funds. The actual transactions should also be reported on Sch D/form 8949 of your 1040 tax return. The 1099-B is specifically used as a receipt of the transaction for tax purposes. U.S. investors who sell precious metals will only owe tax if the price from the sale of these investments exceeds the original price they paid; a profit known as a capital gain. TheIRS taxes capital gains from the sale of precious metals at either a short-term or long-term rate depending upon the amount of time a taxpayer has held onto his investment. While U.S. taxpayers have the responsibility of reporting gains and paying taxes, coin dealers do not usually report precious metal transactions under $10k in cash to the IRS at the time of publication, according to Certified Mint. The IRS taxes long-term capital gains taxes on precious metals at a higher rate than other types of investments if a taxpayer holds onto his precious metals for a year or more. Profits from the sale of precious metals fall under the category of collectibles, regardless of whether the taxpayer owns ETF shares, bullion or coins. The IRS levies a flat tax rate of 28 percent on collectibles at the time of publication that applies regardless of how much income the taxpayer earns in a year.You do not have to report gains until you sell your precious metals, you must claim your capital gains as income in the year in which the metals were sold and will have to pay all taxes on your gains by April 15 of the following year. You should pay estimated taxes to the IRS using Form 1040-ES as soon as possible after you sell your metals if you have a significant tax liability. Failure to do so can result in the IRS assessing an underpayment penalty on all owed tax must attach Form 1040, Sch D/new form 8949 to your tax return to report your gains from the sale precious will report long-term gains on Part II. Individuals with long-term capital gains on collectibles will have to fill out the worksheet on page D-8 of the Instructions for Sch D. All taxpayers with net capital gains from the sale of precious metals will have to complete the Sch D Tax Worksheet on page D-10.

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