Tax on cashing in gold

[OBN]

Originally Posted by flphil View Post
When you sell gold it's considered income but you can write off all associated expenses to find the gold. gas, or vehicle milage, equipment ( detectors, scoops etc.) so although you may have to pay some income tax after your expenses are deducted it shouldn't be that much unless you have hit the motherlode!
HH phil

AAAAAAAmen that means I have to buy a 3030 to cover the Gold I am preparing to sell.......

I wonder if that covers the Pirate ship also?

 

[North☆Star]

When you sell gold it's considered income but you can write off all associated expenses to find the gold. gas, or vehicle milage, equipment ( detectors, scoops etc.) so although you may have to pay some income tax after your expenses are deducted it shouldn't be that much unless you have hit the motherlode!
HH phil

Thank you. I'm hoping others will learn from this!

 

[LordOfTheZincs]

If there is a law where they tax after a certain amount then you sell some then sell some for your wife, kids aunt Flo whoever.........they would never be able to keep up! flipping cars in WA state is the same way, allowed to sell 5 a year after that they tax you for being a used car dealership. LOL

 

[ohiochris]

I looked it up on the internet and this is what I found.

Even gold you paid nothing for , when you sell it the the amount is considered capital gain and taxed at like 28%. I dont think the IRS is gonna let you write off gas money and expenses for metal detecting , unless its a legitimate business and business expense.

Thats the legal side of it , but everybody knows you can sell small amounts and get away with not claiming it or paying anything on it , just depends on how its done. Looks like its on the honor system unless there is enough in it for them to trace it back to you.

 

[Jason in Enid]

I dont think the IRS is gonna let you write off gas money and expenses for metal detecting , unless its a legitimate business and business expense.

Oh yes you can. If you are declaring a profit, then everything else is fair related to it. equipment, travel, fuel...it''s all fair game. Just don't go trying to show a "loss" for a hobby. That's a fast track to an audit.

 

[popatop]

I used to get taxed on my race car winnings which btw the expense far exceeded the winnings. Long story short they would not allow me to claim any expenses, Cost of the cars, tires, Fuel, Mileage, Entry fees, Shop, Utilities or anything else because it was a hobby. That was more then 10 years ago. Maybe things have changed now.

 

[clearwatermike]

Interesting thread! Here's a link to an article I thought was very well-written and informative on this subject. http://www.fool.com/personal-finance/taxes/2007/02/22/is-your-hobby-a-business.aspx#.UsnDGRt3uot

 

[North☆Star]

Very interesting to read peoples responses based personal experiences.

 

[ohiochris]

Oh yes you can. If you are declaring a profit, then everything else is fair related to it. equipment, travel, fuel...it''s all fair game. Just don't go trying to show a "loss" for a hobby. That's a fast track to an audit.

We are both partially wrong according to what I found. Two reasons , it is possible to write off metal detecting expenses , but also because its not that simple to do or ( according to this article ) legally possible for most people.

Article is here : http://finance.zacks.com/reporting-earnings-metal-detecting-irs-5649.html


Three things that stick out at me which limit this ability are.

1. " If you do not make a profit often enough, your business will be classified as a hobby."

2. " You claim these expenses under miscellaneous itemized deductions, but the expenses cannot exceed the amount of income you have earned from your metal detecting activities. Your miscellaneous itemized deductions also are subject to a 2 percent threshold, meaning you can only deduct the total amount of your miscellaneous itemized deductions that exceed 2 percent of your adjusted gross income."

3. " If you use your detector for fun and find primarily household items and spare pocket change, it's probably not worth your while to claim the value of what you find."


Almost everybodys expenses , except for a lucky few , have metal detecting expenses far FAR exceeding their income from metal detecting. Even if you do get lucky and find a little gold now and then.


Atleast from the information found here , for most people its not an option.


Not trying to argue , I just enjoy looking this stuff up and learn a lot from it myself.

 

[Jason in Enid]

You're probably correct that for most it's not worth the trouble. But there are some who measure profits in the thousands, and it's very worthwhile (if they find themselves in the situation of having that $$$ reported)

 

[Dark Chameleon]

Smelting is the act of heating raw ore to get the metal out of it. Melting down your jewelry into bars isn't a great idea since there are few people foolish enough to buy home made bars of metal. If the jewelry you melt has any soldered joints or settings it can no longer be marked with the metal quality of the original piece when melted down and it cannot be used for further casting of a new piece of jewelry since the solder now mixed into the bar will cause pitting in a cast piece. If you go to sell home made bars to any metal supplier you will be charged an assay cost since they need to know what's in it and will never trust a non-commercial quality stamping.

Some smelt to hide the history of an item, some hoarders to reduce the size of, id not recommend to melt and sell as its going to be cheaper then the actual items but the likes of ara should accept it as I'm sure they check the purity of all their 'junk' finds, I know I would.

As for reusing it for jewelry, I'm not a jeweler, I know some company in the south makes most of the jewelry in the country....but there are classes for people to make jewelry...so im thinking a course would be useful to learn to smelt and remake jewelry...id advice looking into things if that was the process someone wanted to take to remake their junk into jewelry.

 

[AceGVSU11]

I don't actually think of it as selling it so there is no need for it to be taxed... really they are the ones buying it so it's more of a loan to the government (since they need it) and I charge 98% interest on it. Besides... it will get melted down, made in to new treasure, and then lost once again for me to find!!! Now I've been repaid for my initial loan, plus the interest, and I may have to mark it up for the obvious increase of inflation as time goes on...