The next IRS overreach will be closer scrutiny of bartering and precious metals. Lauren Lyster interviews David Selig, who argues that the IRS wants to know what you are doing with your gold in the same way that it has brought your foreign bank accounts under closer scrutiny. Also, expats–are you reporting your bartering with 1099B? David Selig says that you must. Did you trade something worth $100 for something worth $2000? That’s a taxable event, potentially a criminal event if left unreported.
Hat tip: Daily Reckoning
Or watch the video at Youtube.
I would not trust any western government to not try to steal some of the retained gold wealth of their citizens after the hyperinflation destroys the western worlds corrupt and doomed fiat currencies. I don’t trust Switzerland, where I live, where there are 2 pending gold initiatives and who has a long and established tradition of gold backed currency. I certainly don’t trust the US which imposes a 28% “collectable” tax rate on any gain in the value of gold that would only be due to the government debasement of the currency.
That 28% collectable tax on gold is also a double tax, just like the double tax on capital gains that expats have to pay on offshore home sales or FC retirement fund gain. The homelanders are such idiots they cannot think of wealth in terms other than dollars. Many times I tried to explain what Ron Paul’s passion for making gold legal tender could mean to the homelanders (there is no tax on gold in Switzerland), they don’t have a clue.
@CH, taxing capital gains that result because of currency debasement is immoral. When a country seizes a person’s possessions, including their precious metals, when they tax their “gains” at any rate because their nominal sale price goes up in fiat debauched currency terms, then that government has become an out and out thief. This is why the Western political system is at the end of the road.
US citizenship…
Either love it or leave it!
That 28% collectable tax on gold is also a double tax, just like the
double tax on capital gains that expats have to pay on offshore home
sales.
Why double taxation on the home sales? You can take a credit for the offshore taxes paid on the capital gain against US capital gains. I’m I missing something?
@human
Buy a small house for 900,000 Swiss francs (CHF) in 2000. At that time, each US Dollar (USD) was worth 1.80 CHF. So, your purchase will be recorded by the US as 500,000 USD.
Sell that house now for 1,000,000 CHF. You real capital gain will 100,000 CHF. Each Canton is different, but for argument’s sake, let’s say that you local capital gains tax is 6%. You will have a 6,000 CHF local capital gains tax.
Now it’s the US’s turn. To my very limited knowledge, I don’t think you can credit the capital gains tax from the Swiss. However, I think that you can deduct it from the sale price. So, let’ do it that way. Now the USD = 0.90 CHF. The US will record your sale as 1,111,111 USD – 6,667 USD in Swiss tax. That comes to 1,044,444 USD. They record your gain as 1,044,444 – 500,000 = 604,444 USD.
Any gain on your primary residence that is over 250,000 USD will be taxed as capital gains. So, you will have 354,444 USD gain to be taxed. The capital gains tax rate (until 31 Dec 2012) is 15% (I think). So, your US capital gains tax will be 53,167 USD.
So, this is what they mean by theft through currency debasement. The good news is that 53,167 USD is now only 47,850 CHF. That’s a really hollow consolation when you consider that your real gain was only 100,000 CHF. So, as an American abroad, your capital gains tax rate on your primary residence is (47.8% + 6%) 53.8%.
If homelanders faced this kind of taxation, there would be riots, but we are supposed to just take it and respect the fact that if we did not submit to this kind of taxation, homelanders would have to pay more in taxes for the services that they receive.
Also, we should add that the capital gains tax rates could rise next year depending upon election outcomes.
NB: If the US credits the local capital gains tax, the net taxation from the US would be 42,750 CHF. It is still a combined 48.75% capital gains tax.
http://www.gp.se/resor/1.1115677-utgaende-norska-sedlar-skapade-panik
You might be able to google translate this.
It is how the scandinavian federal reserve screws its economic citizens. In this case, all the Swedes with some Norwegian currency in their drawers were making a run to the banks to change them in before the deadline–same as the Norwegians are doing at home. Every so often, they make currency or coins obsolete. If you don’t know about it–tough luck. No doubt I have about 1000-2000 NOK ($200-$300) laying around that are now paper for my outhouse.
This makes your mattress an unacceptable alternative to the banks and their FATCA issues.
sorry for above, edit function not working.
Re IRS interest in gold. Since gold fillings used to be the material of choice, and there are still people walking around with it in their molars, will transporting said dental work across the longest shared border, constitute some US federal crime? Particularly if the fillings are those of an expatriate? If I move my parents’ ashes across the border, and they had gold in their teeth, will they sift through before I will be allowed to bring them out of the US and into a ‘foreign’ location?
Is the gold in the teeth of those US citizens living abroad taxable? Do I need to report it on an FBAR? Is it subject to FATCA?
Is there a form for teeth yet? No need to ask about the penalty – it’ll be in units of ten thousand, or 500% of the value of the dental work.
And what about platinum, or other rare metals – if used in implants, and artificial joints, etc.
@badger,
Are you givng the IRS ideas? It all gets rather
sillyludicrous.@calgary, I’m sure they’ve already got something in the IRM about gold teeth, and will implement screening at all border exits. Actually, what would happen if you were transporting ashes? My mother had gold fillings, and I believe her dentures incorporated the original teeth – with the filling. What if as a memento, I had brought away to my ‘foreign’ home, her metal dental plate with the teeth and filling – while collecting her personal effects from the hospital? Hard to explain re the airport scanners, and also – transporting gold. Sounds bizarre, but that’s the life we live now post 911 – now that the IRS and Homeland Security run the US.
Well, badger, seeing the video you posted from Jack Townsend’s Federal Tax Crime site, I’d say you’re (we’re) up sh** creek.
I would like to provide your readers with information about real life tax cases and issues that we are presently working on.