IRS Gold Bullion Transaction Reporting Requirements
Reporting gold transactions to the IRS
I am writing this article because I get asked about the requirements for reporting to the IRS for gold bullion transactions all the time. This article shall not be construed as legal or accounting advice. This is info is just what is to my best knowledge. Consider this information about IRS Gold bullion reporting as “pointers”.
Detailed Authority Articles
In my research about this subject, I have fount the following two articles the best information available. I am sure that there is some info at the IRS, however, it is not easy to find.
- IRS and Government Reporting Requirements for Coin and Bullion Dealers by
- Bullion Reporting Rules – Industry Council for Tangible Assets – Broker Reporting (1099-B) By Blanchard and Company – Blanchard
- IRS – Sale of Property
How it Works
The IRS statutes concerning the sale of large volumes of gold precious metals is Revenue Procedure (Rev. Proc. 92-103). There is plenty of space for interpretation in this procedure. This is both good and bad. However, when there is so much latitude, it means that, when it comes to gold transactions, the IRS will do as it pleases, because the boundaries are vague.
For practical purposes, few transactions are reportable. The form to be used for reporting is 1099-B. This is needed for paying with cash. If a cashier’s check is used, this is not needed because the issuing bank will do the reporting.
Below is a table from the article by Patric Heller listed above.
|Item||Minimum Fineness||Minimum Reportable Amount|
|Gold Bars||0.995||Any size bars totaling 1 kilogram (32.15 troy oz.) or more|
|Silver Bars||0.999||Any size bars totaling 1,000 troy oz. or more|
|Platinum Bars||0.9995||Any size bars totaling 25 troy oz. or more|
|Palladium Bars||0.9995||Any size bars totaling 100 troy oz. or more|
|1 oz. Gold Maple Leaf||as minted||25 1-oz. coins|
|1 oz. Gold Krugerrand||as minted||25 1-oz. coins|
|1 oz. Gold Mexican Onza||as minted||25 1-oz. coins|
|US 90% Silver Coins||as minted||Any combination of dimes, quarters, or half dollars totaling $1,000 face value or more|
As per this information, any combination and amounts of gold bullion that don’t fit in the above description do not need to be reported. Maybe the seller of the items would have to self report the amount money received for the gold bullion. That is unclear to me.
In addition to the above, there is Anti-money laundering (AML) regulations. Section 352 of the USA Patriot Act of 2001. This requires the reporting of “suspicious” activity associated with gold should be reported. To me, the word “suspicious” is almost in the eye of the beholder. Unless something is evidently wrong, reporting would be a serious misdeed. Reporting under the patriot act will most likely trigger a serious investigation.
Scrap Gold Reporting
Scrap gold is any gold alloy item that will be refined in order to extract pure gold from it. As far as I know, there is no need to report to the IRS. Scrap gold is not “tradeable gold”. I know very well this part of the subject. As a precious metal dealer, scrap gold fits under “cost of goods sold”
- Unless you are selling a very large amount of gold or other precious metal bullion, the IRS reporting requirements will not affect you
- Scrap gold is not tradeable. Therefore, in my opinion, it does not fit into the reporting requirements
- Unless you are an evident terrorist, chances are that your transaction will not be reported to the Homeland Security Department
- Don’t consider any of this legal advice or otherwise
- For more info, refer to the articles listed above