Hi all. I have only recently found out about the amazing opportunity in investing in gold and silver bullion. I only stumbled accross this about 2 weeks ago and have managed to buy around 38oz so far. I intend to buy a bit more each week. Im really excited about what the potential is for silver in the future. Im not sure how far the price will go up or when it will expode but from what I can see its gonna happen eventually, just a matter of when. My plan is to just keep stacking week by week until it happens. My question for you is when the price does explode and I do sell my silver back what is the best way to go about it? Do i sell it back to a dealer or mint? Do i sell it privately? If I sell it back to a dealer or mint then there will be a record of sales, do i then have to pay tax on the profits. Do i have to pay tax regardless to who i sell my silver? Thanks for the help guys. This is a great forum, keep up the good work and keep stacking.
Welcome. Lots of ways of divesting your investment, but regardless of the method the sale will be considered a capital gains event for tax purposes.
First of all - welcome! I'm pretty sure we have a few Accountants amongst us here - a new member recently declared he was and offered some advice on SMSF... Whoever you are - please post the CORRECT answer In the meantime - As I understand it CGT is payable but drops to the lower rate after 12 months...same with trading (unless you hold the stock for more than 12 months) Personally I dream of paying $1M in tax some day ... because it means I made a slaying on the investment
This is a polarising subject with some electing to pay tax regardless, and some not. However, for what it is worth, there is a view that no tax is payable on legal tender, and there are also exemptions from any perceived tax obligations if your intent is to preserve wealth/purchasing power and not make a profit. Do a search for appeals tribunal rulings in previous posts on this subject, and make up your own mind.
As a Golden Rule If you do a trade where there is cash exchanged in a brown paper bag in a dark alley, then you dont have to worry too much about tax. (edit).....for the uninitiated, this does not constitute tax advice....
If I can clarify my earlier post - if I buy gold for say $1500 and then trade it later when gold is $2000 for $2000 worth of silver, is that a CGT event? I haven't exactly profited as it is the same amount as the risen gold price?
Yes. Barter is considered to consist of purchase and sale transactions from the ATO's perspective. If there's no denominated value on the exchange, there's rules around market value etc. Also explore the CGT rules when it comes to collectible coins purchased for under $500. But in essence, if you buy a kilo of silver for $1200 and sell it for $1300, there's a $100 capital gain that the ATO will want you to declare.
From what I can gather faux-courts are not bound by precedent. They are however bound by Ch III court decisions - would be awesome for someone to take it to a Full Federal or High Court.
Decisions of courts that fall under Ch III of the Constitution i.e. Federal Court, High Court etc. Separation of powers and whatnot. The Administrative Appeals Tribunal and other Taxation Tribunals are not real courts (come under the Executive branch of govt.) so don't have all the proper rules of evidence and precedent etc. but you can appeal their decisions on some grounds to Fed and High Court to obtain a binding precedent.
This is actually quite a complicated matter and there are so many issues at play that to describe them all would be a novel - for the good of all stackers I'll give it a go: There is an argument that if you have purchased in a sophisticated way (kept detailed records, purchased at certain thresholds, have made a significant number of purchases and sales) and all with the intention of making a profit then you are NOT making capital gains but revenue gains - that is, you are deemed to be running a business and the silver you have on hand is treated as trading stock (stock on hand at the end of the financial year). In this case, your profit from trading would be calculated as your sales less cost of goods sold less other operating expenses. The value of COGS is important in this calculation and depending on other factors (SBE considerations) you would be able to value your stock on hand at the lower of cost and net realisable value (meaning you basically have the ability to affect the value of COGS to make the smallest profit possible given the silver price at 30 June). After those calculations are made then any profit would be added to your regular taxable income at the end of the year and you would have to pay tax at your marginal rate. If you have made a loss at the end of the financial year (which would be more than likely if you have accumulated silver - low sales, high purchases and the ability to value the silver at cost means you make a loss) then you must satisfy a test to be able to claim that loss as a deduction against your other income. If you don't satisfy one of the tests (there are four from memory) then your loss is considered a non-commercial loss and must be carried forward to be offset against any future income. Ok - so if this is not you and you have basically just bought some oz of silver (similar to buying a few shares) then as far as I am aware there is no exemption on capital gains for precious metals. As such, it is the same as any other investment and the capital gain is calculated as Sale Price - Cost Base. Note that the cost base may not be just what you paid for it - if you have borrowed to invest then the interest would add to the cost base (in the example above it would be expensed from year to year) you would also be able to add storage and and any other cost incurred in the sale (you would take the net of transportation and bank charges) If the silver is held by you as an individual and you have held the silver for more than 1 year then you are entitled to a 50% CGT discount (note that there is no exemption for companies - and it is limited in super funds). Example: Sale price is $1000 and cost bas is $500 (assume held for more than a year) - you have made a $500 gain that gets discounted to $250. This is added to your taxable income and you pay tax on the $250 at your marginal rate. That is a bit of a simplified explanation and everyones situation is different. Normal 'can not be relied upon as advise' disclaimer applies. Hope this helps
Are Elemental...now I remember you Knew we had an Accountant Stacker here... Thanks for the post...clear as mud but you've made it less murky...
For those that are lazy, a link to one of Boston's previous post on the topic: http://forums.silverstackers.com/message-36860.html#p36860
I don't see how you get from Sec115 "A State shall not coin money, nor make anything but gold and silver coin a legal tender in payment of debts" to no tax payable on legal tender.
Sorry Bron, I would like to discuss it further, but truth be known I am all tuckerred out right now. It's been a taxing (pardon the pun) week and an even bigger day today physically, and I just don't have the cranial accumen to joust. Apologies.
"A State shall not coin money, nor make anything but gold and silver coin a legal tender in payment of debts" I guess my next speeding fine will be denominated in ounces of gold and silver then...
