Fair Treatment for Precious Metals Investors Act
S.1367: Fair Treatment for Precious Metals Investors Act
Summary: Seeks to amend the Internal Revenue Code of 1986 to treat gold, silver, platinum, and palladium investments in the same manner as stock and mutual fund investments for the purposes of the capital gains tax rates imposed.
Sponsor: Sen. Michael Crapo
Date Introduced: June 25, 2009
Current Status: Referred to Committee (June 25, 2009)
The bill seeks to amend the Internal Revenue Code in order to attain fair treatment for precious metals investors as compared to stock and mutual fund investors. Under the current tax law, investments in precious metals are treated as “collectibles gains” which are subject to a tax rate of 28%. By contrast, investments in stocks and mutual funds are currently subject to a tax rate of 15% if the assets are held for more than one year.
The bill would amend Section 1(h)(5) of the Internal Revenue Code of 1986 by striking ‘(as defined in section 408(m) without regard to paragraph (3) thereof)’ and adding a new paragraph:
‘(C) COLLECTIBLE- For purposes of this paragraph, the term ‘collectible’ has the meaning given such term by section 408(m), except that in applying paragraph (3)(B) thereof the determination of whether any bullion is excluded from treatment as a collectible shall be made without regard to the person who is in physical possession of the bullion.’
Section 408(m) defines “collectibles” for the purposes of treatment within individual retirement accounts. Paragraph 3 had specifically created an exception for certain coins and bullion for the purposes of the subsection. Section 1(h)(5) defines the maximum capital gains tax rates for collectibles gains. This section references 408(m) to define collectibles, but specifically disregards Paragraph 3, thereby enveloping precious metals within the definition of collectibles.
The amendment stipulated by the bill would define collectibles under Section 408(m) including the exception for certain coins and bullion. This would result in the exclusion of some gold, silver, platinum, or palladium coins and bullion from the classification as collectibles.
If the bill becomes law, the following coins and bullion would be excluded from classification as collectibles:
- Gold coins described in paragraph (7), (8), (9), or (10) of section 5112(a) of title 31, United States Code. (American Gold Eagles)
- Silver coins described in section 5112(e) of title 31, United States Code. (American Silver Eagles)
- Platinum coins described in section 5112(k) of title 31, United States Code. (American Platinum Eagles)
- Coin issued under the laws of any State.
- Any gold, silver, platinum, or palladium bullion of a fineness equal to or exceeding the minimum fineness that a contract market (as described in section 7 of the Commodity Exchange Act, 7 U.S.C. 7) requires for metals which may be delivered in satisfaction of a regulated futures contract. (Other bullion coins or bars meeting the requirement for minimum fineness)
In order to become law, the bill must be passed in the House and Senate, and then signed by the President. The bill currently has three cosponsors and has been referred to committee. A similar bill had been introduced in 2007, but was never voted on in the House or Senate.
The metal price is up this year. But it represents the inflation concern instead of really “gain”. Gold and silver were used as currency for thousand years. Itself can’t gain value. taxing metal gain is not logical.
As we can see, if government spending too much and can’t get budget fix, they are always trying to increase tax. Finding excuse for increasing tax is easy for them. The IRS tax code is a evidence. No body understand the tax code except accountants who have tax education. Why? when government find a excuse to raise tax, it get approve by house and senate (most people don’t know how they pass it without approval of American people). but the tax code has some “hole”. The business man always find solution to bypass the tax code. Then IRS has to add additional code to fix the hole. year by year, the IRS tax code book gets bigger and bigger. Now, even tax accountants are confused about the tax law.
I am a accountant. I know Americans have paid a lot of money to tax accountant and tax related software to solve tax filling. Is it necessary? No. The root of the tax problem is government spending. The constitution mentioned clearly that government shouldn’t over spending. But the government and lawmaker seems ignore the constitution. They are getting paid by tax payer. If taxpayer limited the government spending, they might not get paid.
In conclusion, all the problems we are facing now are because of government overspending. You name it. national debt, federal tax, State tax. Government has all power to threat Americans for excuse of increasing tax. (homeland security, health care). Government might not increase the tax right now but put huge national debt on taxpayer. Tax payer might not make attention about it. But the debt has to be paid some day by tax.
type of tax government is taxing:
1. personal tax
2. inflation tax (most people are not aware this tax. it is secret tax government never talk about)
3. Environment tax.
After paper currency collapses, this will be an automatic VAT on money.
It’s ironic how Honduras is looking to be more protective of their Constitution and their Public’s Liberty than the United States.
If we didn’t have an intrusive income tax to begin with, none of this would be an issue. Taxing citizens is the opposite of freedom. We should be taxing foreign companies, like we used to do for a long time in this country. Allowing Congress to tax Americans in all kinds of ways is absurd!
Congress should have to petition the states and citizens for money, and we should pay them based on performance, rather than we performing for them, lest we go to jail. This is not freedom!
Congress and the President will never sign this legislation making bullion taxed at a more fair rate because they are thieves, and we allow them to be.
No offense, but this is complete crap because the IRS has quietly been refunding to me every damn penny I paid in for the past 5 years, (not only me but millions to others as well http://www.losthorizons.com) all the while trying to discourage me from asking for it back. And all the while trying to discourage anyone else from asking for it back with a massive propaganda campaign, so the media will never promote it either because the “income” tax is a gravy train and it does not apply to 99% of Americans and the IRS quite obviously knows it as well because they have been sending me my FICA, SS, Medicare, Federal as well as my state refunds PLUS INTEREST when you know how and why you didn’t owe it in the first place. Such propaganda, unreal. I would highly recommend you get educated yourself on the what the term “income”, “wages”, “employee” and “employer” REALLY mean because Congress is duping us big time. I invest in precious metals because the green fiat paper trash currency is not really money either. But that’s a whole nother propaganda machine that you are NOT supposed to figure out.
I suspect this seems good but is will end up as a trick… for example ,,, a mariage license ,,, for thousands of years,, no one needed one you just got married according to the laws of god and your religion,,,, only when people were concerned about interracial marriage did the come up with the scam of a license for that which we were allways entitled,,,,,,,,
how about just declaring that gold is money and centralized credit is fiat currency,,, and that it is my right to keep and accumulate gold without harrasment or tryany……
To Whom It May Concern,
I have a Constitutional right to hold gold and silver bullion as legal tender in the USA and all sworn representatives of the USA have the responsibility to protect that right, having sworn their allegiance to the Constitution of the USA. As such, any gain in value or purchase power of the bullion should NOT be taxed at all, since a Federal Reserve Note of any denomination is legal tender and is NOT taxed on its gain in value or purchase power. I do not hold gold and silver bullion for investment purposes, but as legal tender. Those who invest and/or trade in bullion should be taxed on their gain in value if any, but not citizens of the USA who simply hold a combination of Federal Reserve Notes and bullion as a means of savings. Thank you for your consideration and please pass this legislation. At least it is a step in the right direction of resolving the the inequality of taxation of legal tender between Federal Reserve Notes and bullion.
I would like to see this bill passed as I am a buyer in both gold
and silver. I also would like for some one to do the same with
other such bills.
This plan makes total sense; removing punitive taxation on precious metals’ investors is imperative.
LET ME SEE , IF I PICK UP A ROCK AND CALL IT PRECIOUES , AM I SUPPOSED TO TELL THE IRS I HAVE A ROCK , BECAUSE IT IS VALUABLE TO ME ? WILL THEY TAX” IT …OR IF I FIND A GOLD NUGGET , DO I HAVE TO REPORT IT , SO THEY CAN TAX IT ?…I THINK THE BEST THING TO DO IS KEEP YOUR MOUTH SHUT !!!….IF I USE THEIR FIAT GREENBACKS TO BUY THE ROCK , OR A GOLD ROCK , SO WHAT NONE OF THEIR BUISNESS , …CASH BUYS LOTS OF THINGS , YOU PAID TAXES ON YOUR MONEY , AND IF YOU SELL THE ROCK , SO WHAT ..NONE OF THE GOVT. SHOULD BE IN YOUR POCKET !!…CASH IN …CASH OUT …THEY WANT TO KNOW ABOUT YOUR GUNS , TOUGH LUCK IF THEY KNOW ABOUT IT , CAN COME IN AND CONFISCATE THAT AND YOUR GOLD …THE GOVT. HAS WAY TO MUCH POWER AS IIT IS ..DO NOT BE NAIEVE…KEEP MOUTH SHUT …
Much of the “bullion” I hold is “monetized”. What has always bothered me about discussions on sales of gold being subject to 28% tax is that it is a maximum rate of 28% on your gain. Correct me if I’m wrong. If I’m in the 15% income bracket then I pay 15% capital gains regardless of whether it’s from bullion sales… right?
This is just the 2009 version of the gold confiscation act under the FDR administration. They want to discourage ppl to hold physical gold because that would mean the REAL money being in the hands of the people That’s all that is…but we all know that we don’t report anything anyway. What are they going to do? Come and raid each and every holder of gold and demand taxes?
seems to me this bill could pave the way to another confiscation act. Who knows, maybe it’s in Bernanke’s little bag of tricks. Why would anyone who holds US gold, silver and platinum coins as insurance against paper be in favor of it?
to nextgenpub,
tax rate for ordinary income and tax rate on capital gains are not related - a review of instructions for form 1040 will reveal this.
that’s why those in very high tax bracket have an incentive to invest because rather than just hold assets and not use them for business or investment purposes. capital gains rate is less than the highest ordinary income rates.
I am being told that the government cannot confiscate a Silver Eagles IRA by a broker at FAMC. Is this true? If the government started confiscationg VIPs and IRAs could they confiscate a Silver Eagle IRA?