Tax Those Golden Coins

As if having an unwelcome health care reform bill thrust down our throats was not enough we now find a small scarcely detected provision attached to the legislature that places gold coin purchasers and sellers at a major disadvantage.

We've all been taught over the years that the acquisition of gold and in particular coins embodies a great hedge against possible inflation. Most gold dealers will just about guarantee that the coins you purchase will intensify in value over the years that you hold on to them. You can generally find many name celebrities such as Glenn Beck and others, bragging up the benefits of owning and storing up on gold coins.

Unfortunately, section 9006 of the recently enacted "Patient Protection and Affordable Care Act" has amended the IRS Code to alter the actual scope of the Form 1099. The 1099 forms are traditionally used to report any miscellaneous income which may be associated with those particular services provided by independent contractors. However, starting on January 1 of 2012 the Form will also become a means by which the purchase of goods and services by the self-employed people can be reported to the internal revenue service. These forms will be required to be submitted for any amounts in excess of $600 during any calendar year. You may be asking how this affects you as a gold coin collector. These precious metals as well as the bullion will now fall into this same category and as such the coin dealers and the purchasers will need to submit the necessary 1099 forms to our government.

The IRS has claimed that these changes were required in order to tap into the vast reservoir of bypassed and unclaimed tax revenue owed. Naturally the underhanded way for our government to pass this bill was to tack it onto the health care legislation. Authorities assert that with the commencement of this newly enacted law they will amass over $17 billion dollars over the next 10 years.

This presents a major problem particularly for the coin dealers themselves as they regularly acquire their inventory from, not only other dealers but additionally from the public at large. This is an notable distinction from other types of businesses where the owner may transaction business with a limited quantity of suppliers only. What happens here is that each and every time an American taxpayer sells in excess of $600 in gold to a registered dealer the transaction must be reported to the government by both parties.

Some coin dealers frequently deal with thousands of customers weekly thus the owners will be bogged down with all the added government IRS paperwork. It is estimated that dealers could be filling out from 10,000 to 20,000 tax forms yearly.

Statistically speaking trading in gold coins has seen a drastic surged since Americas financial crisis has developed and Obama has assumed the office of President. Of interest in this rise of popularity is that the actual buying of gold in place of options has been an increasing trend with those individuals who are fearful of America's economic policies under President Obama.

Copyright @2010 Joseph Parish

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