For those who purchase gold in the United States, there are a few federal laws to be aware of—specifically, regulations governing which gold purchases are required to be reported to the government. Keep reading for information on when you must report a gold purchase, brought to you by the experienced professionals from
First National Bullion and Coin. San Diego collectors trust our extensive knowledge about every aspect of buying and selling precious metals.
Laws Concerning Gold Purchases
Many people who buy precious metals are looking to avoid the current financial turmoil, which is to be commended. At the same time, some of the old laws concerning the ownership of gold bullion appear to still be in place. However, this doesn’t mean a person cannot buy gold. The fear that individuals would hoard gold (and crash the American economy, which at the time operated on the gold standard) was the idea behind the law of 1933, which outlawed private ownership of gold. That law was repealed in 1974, and it’s only relevant today with regard to certain instances of purchasing gold.
Criteria a Gold Purchase Must Meet
The amount of gold being purchased, the way it’s purchased, the time frame it’s purchased within, and other legal points will determine reporting requirements for gold purchases. Please note this isn’t related to capital gains taxes, which are a different subject. The reporting laws for gold purchases are similar to the “Know Your Customer” law, popularly known as “KYC,” that banks are required to use to prevent money laundering.
When a Gold Purchase May Not Need to Be Reported
If a person walks into a local gold coin shop and buys $12,000 worth of gold using a cashier’s check, this gold purchase wouldn’t be required to be reported. A cashier’s check over $10,000 isn’t considered cash, and paying with one is seen as different from paying with paper currency. As we can see, the legal definition of the word “cash” is important here.
When a Gold Purchase Must Be Reported
In a different example, someone walks into a local gold coin shop and uses cash (paper currency) to pay for gold coins. The buyer pays $8,000 for the first purchase. Within three or four hours, the buyer returns to the same shop and pays $3,000 for more gold coins. This is a reportable event. The purchaser has met a reporting requirement, and a report (Form 8300) must be filed with the IRS.
Information the IRS Will Require
When a gold purchase is required to be reported, the dealer will be the one to report it. Form 8300 requires information about the gold buyer, including name, social security number, address, and license number. If some of the form is left blank, the dealer is still required to send the form to the IRS.
