What is the rate of CGT when selling gold? Is there any exemptions? Ie, I don't pay CGT if using the funds to put towards my PPOR
If you think the US economy is going to go up, and reduce unemployment from it's official 10% (unofficial 15-20), then yes, gold is a bad investment.
Gold is treated like any other asset - gain taxable if held less than 1 year, 50% discount if held for more than 50%.
So how much is the actual % taxed via CGT if held for longer than a year? Say you sell @ $10,000 profit after 2 years, what is the taxable income?
$5000 at your taxable rate. i.e. if your tax rate is 30% then the total tax payable on the sale would be $1500 on your $10 000 profit (10 000 / 2 * 30%) malachii
It just means that the profit is added to your normal income and is taxable as such. o if you had no other income, then the $2000 profit would be tax free effectively.
I was looking into this recently. I think this post sums it up succinctly: In addition to the above you also need to be aware of the notion of "CGT events". Basically you can be deemed to have made a capital gain even when you didn't actually receive any money. For example, if you donated your gold bar to a charity, you're still liable for the CGT on the net gain as if you had actually sold it at that point in time.
CGT is the way governments make sure everybody loses money with inflation. If you sold 1 oz gold after the CGT tax you only get oz of gold in cash and you actually lost 25% on that investment. If you plan smartly today you can avoid that in years to come, and beat ATO in their own game.
I think you are going to have to elaborate Do you mean buying smaller, fractional coins now? (I think you mentioned something about a $500 limit in another post).
You can sell gold and buy house then there is no capital gain. What you are doing is tranferring one asset class to another asset class. This is just my thinking. Please consult accountant.
As I said in an example before buy the proof version for bullion price under $500 The $200 Koala is the best example. Both bulling and proof sell for the same price ATM. In the future you only have to pay CGT on the bullion vession.
Projack here is the ruling from the ATO: http://ato.gov.au/individuals/content.asp?doc=/content/36555.htm Here it talks about a 'collectable' bought for less than $500 is exempt from CGT. Coins are specifically mentioned as a collectable. But there is no distinction made between bullion and numismatic. You've used the Aussie $200 gold coin as an example elsewhere, where the proof version is exempt but the unc attracts CGT. I don't understand this. For example, the 1993 $200 Aussie has a proof mintage of 5,000 and an unc mintage of 3,000. So the unc is rarer that the proof. Yet the proof is CGT-exempt? Just trying to understand ... Thanks.
I don't think the "collectable" exemption is specifically about the form of the coin, bullion or numismatic. Just because they mention the generic word "coin" as a collectable does not IMO mean that all coins are exempt. I believe if there was a court case on this the interpretation would be that within the context of the whole wording of the exemption that "coin" meant a "collectible coin". What a "collectible coin" is IMO based on the logic the ATO itself applied when ruling on GST on bullion vs proof, is how much money is paid for it above its intrinsic (precious metal) value. If you paid $400 for a unc bullion $200 coin, the fact that the price was close to its intrinsic value would mean the ATO would NOT deem it a collectible, no matter what mintage it had. This is my interpretation. One thing that is not clear is if a coin can change from numismatic to bullion and vice versa. For example if a proof 1/4oz gold coin was originally sold for $1000 then it would be classed by ATO as numismatic and attract GST but exempt from CGT. Question is if it loses it numismatic value because too many were made and now trades for metal value only, whether it is deemed non-numismatic and thus GST not apply but CGT does. I think logically its status should change based on whether the market thinks it has numismatic value. Finance guy in Perth Mint disagrees with me and thinks it retains its "status" from when it was first issued. If he is correct then proof coins now only worth metal value AND under $500 would be CGT free. I suppose we will just have to wait for the first bullion/numismatic/CGT court case.
I know this is an old post but have been following the posts for new stackers by house and this is linked - I've been searching for the legal definition of a collectible and trolling the ATO decisions about what a collectable is; using the normal rules of legal construction and interpretation I think that legal tender coins (bullion or proof) purchased under $500 should count as collectibles; especially given that they meet that definition and they are not contradicted by the things that are specifically not excempt by this section (including foreign currency); Does anyone have an update to see one way or the other if coins purchased under $500 are collectibles and as such CGT exempt?
Can't you just buy and hold. Sell it off in your retirement years bit by bit. Stay under the tax free threshold and pay zero tax. Buy 1oz gold now at $1400, retire when its 10k per oz. Sell off 2 oz's per year. Stay under the $18,xxx threshold (provided you have no other income). Slam
Slam, I dare say you could do that; however mabe the GSR changes and you want to get out of silver and into gold or vice versa, changing asset classes is a CGT event, so you are not retired - trying to place your wealth somewhere safe and suddenly someone audits something and you are now liable for CGT on top of your current income. I'm just interested if a strategy for "collectible" PM would be a safer tax bet or if its just conjecture (yes I know people's boat full of silver sinks and others can find a trove in their backyard just before they sell it helping any tax issues)
Or, just be glad you pay a tax because it means you have done a profit? Generally speaking, investment decisions should not be purely based on tax considerations.
