Selling precious metals (in California)
April 14, 2006 9:33 AM Subscribe
Bought some gold coins when they were "cheap" several years ago. Now, with the price up, I'm considering unloading them. Good idea? Any hassles? Any local experience?
I mention California because of this curious law: any precious metal purchase *over* $1000 has no sales tax. But of course, you pay a commision, both buying and selling. I wonder, do they take down personal info for this type of transaction (i.e. can I avoid reporting the capital gain?) And with the price so high, won't my local coin shop be reluctant to pay out double what I paid them, several years ago? Especially, would they buy just after the peak?
I mention California because of this curious law: any precious metal purchase *over* $1000 has no sales tax. But of course, you pay a commision, both buying and selling. I wonder, do they take down personal info for this type of transaction (i.e. can I avoid reporting the capital gain?) And with the price so high, won't my local coin shop be reluctant to pay out double what I paid them, several years ago? Especially, would they buy just after the peak?
I bought in California in 1999 to take advantage of the y2k semi-panic. Then I wisely forgot to sell. I sold about three months ago, and had no problems finding a relatively local place that would take them. When I first purchased the coins, I left them in the plastic sleeves and bundled them all into a padded bag. Cashing them in, one clerk noticed a burring on the surface of one coin, but then the supervisor indicated that it was just fingerprint oil or some such thing -- but I suppose if it was something more serious they wouldn't have bought the coin back or knocked off a large percentage of the price.
It's been my personal experience that Unca Sam doesn't like it when you forget (as in my case; or in your case, "forget") to declare any sort of income. In my case, He waited a good two years to mention it, then dinged me for the "late fees" as well. That was fun.
A general tip for people who want to buy now -- foreign gold coins are taxed higher. And don't touch them, treat 'em like eggs.
posted by user92371 at 9:52 AM on April 14, 2006
It's been my personal experience that Unca Sam doesn't like it when you forget (as in my case; or in your case, "forget") to declare any sort of income. In my case, He waited a good two years to mention it, then dinged me for the "late fees" as well. That was fun.
A general tip for people who want to buy now -- foreign gold coins are taxed higher. And don't touch them, treat 'em like eggs.
posted by user92371 at 9:52 AM on April 14, 2006
Two of the major California Numismatic Associations are:
here and here.
They should be able to point you to reputable dealers, local coin shows, and be well versed in the necessary regulations. You could also go through the American Numismatic Association website here.
posted by MasonDixon at 10:00 AM on April 14, 2006
here and here.
They should be able to point you to reputable dealers, local coin shows, and be well versed in the necessary regulations. You could also go through the American Numismatic Association website here.
posted by MasonDixon at 10:00 AM on April 14, 2006
Your local coin shop, if it is an actual coin and metals shop, and not merely a pawn shop that occasionally has coins, should give you no problems about buying the coins back. They're going to turn around and sell them to someone else right away most likely.I'm not a coin collector and I only had two real experiences with coin shops, but both suggested that what I'd seen as a comic collector was true of coins, also. Which is to say: There's a world of difference between (a) what a book tells you a comic's worth versus (b1) what a store will pay you and (b2) the odds you'll find a store willing to buy that comic. And having worked on the other side of the counter, I would have taken issue with the suggestion that a store can buy comics from you and then "turn around and sell them to someone else right away."
Is the coin-collecting community really so different? Can you walk into most stores and expect to get book value? Can you realistically expect the store will buy whatever you're selling?
posted by cribcage at 10:15 AM on April 14, 2006
Gold is doing brisk business on eBay these days, often slightly topping the daily high on the spot market.
posted by sonofsamiam at 10:46 AM on April 14, 2006
posted by sonofsamiam at 10:46 AM on April 14, 2006
Gold coins are money, much more so than dollar bills. You can trade them for dollars easily and conveniently, and usually for pretty close to the spot price. (you definitely will lose a percentage, the dealer has to pay his bills.)
US Gold Eagles carry a premium of about $20/ounce. You should be able to get a little more than $600 for a one-ounce Gold Eagle. As I'm posting this, the gold price is $598.80, and GoldMasters is quoting a $605 buy. Coins from other countries carry less of a premium; for whatever reason, US gold coins sell for a little more than any other bullion coin I know about. (this is excluding collectibles).
I can't speak to the buying preferences of local dealers, but the gold market pretty much defines liquidity. Someone will always buy it, so it would be unusual for a coin shop to refuse a purchase. They don't give you as much as they can sell it for, so even if they turn around and dump it on someone else an hour later, they'll make a couple percent on the deal.
Gold is very near a 20-year high, so it's not like selling them now is actively dumb or anything. Given the massive money printing by the Fed, however, combined with the foolishly spendthrift US government, I think it's likely that it will go much higher over the next ten years. If you do trade the gold for dollars, I suggest using the dollars to buy something else with lasting value.
Note: if you're dealing with RARE coins, that's a different thing... the buys/sells on those can be like the comic books that cribcage mentions. Collectible coins are, by and large, a total ripoff. But bullion coins aren't like that; they're money.
posted by Malor at 11:17 AM on April 14, 2006
US Gold Eagles carry a premium of about $20/ounce. You should be able to get a little more than $600 for a one-ounce Gold Eagle. As I'm posting this, the gold price is $598.80, and GoldMasters is quoting a $605 buy. Coins from other countries carry less of a premium; for whatever reason, US gold coins sell for a little more than any other bullion coin I know about. (this is excluding collectibles).
I can't speak to the buying preferences of local dealers, but the gold market pretty much defines liquidity. Someone will always buy it, so it would be unusual for a coin shop to refuse a purchase. They don't give you as much as they can sell it for, so even if they turn around and dump it on someone else an hour later, they'll make a couple percent on the deal.
Gold is very near a 20-year high, so it's not like selling them now is actively dumb or anything. Given the massive money printing by the Fed, however, combined with the foolishly spendthrift US government, I think it's likely that it will go much higher over the next ten years. If you do trade the gold for dollars, I suggest using the dollars to buy something else with lasting value.
Note: if you're dealing with RARE coins, that's a different thing... the buys/sells on those can be like the comic books that cribcage mentions. Collectible coins are, by and large, a total ripoff. But bullion coins aren't like that; they're money.
posted by Malor at 11:17 AM on April 14, 2006
One outside possibility is to look for businesses in your area that specialize in buying estate valuables. If you're selling collectible gold coins, a third-party appraisal would be very helpful. Also, it may help if a collectible coin has been "slabbed"--graded by a professional grading company and then encased in plastic with the certified grading--although those can be controversial, too. Coin collecting at that level seems to attract a lot of crotchety, crabby old guys who are ready to nitpick a newbie to pieces.
The value of bullion coins is in the newspaper every morning, pretty much. Malor's comment is right, uh, on the money.
Note that the minimum value of a collectible gold coin would generally be the bullion value, unless it had a big hole punched in it or something.
posted by gimonca at 4:22 PM on April 14, 2006
The value of bullion coins is in the newspaper every morning, pretty much. Malor's comment is right, uh, on the money.
Note that the minimum value of a collectible gold coin would generally be the bullion value, unless it had a big hole punched in it or something.
posted by gimonca at 4:22 PM on April 14, 2006
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They're going to turn around and sell them to someone else right away most likely.
I'm not sure about California, but in some states incoming precious items require the presentation of a drivers license. There is the additional Federal burden of reporting your sales of gold over $10,000. They have to take down your SSN and some other personal information.
If I remember correctly, there is a loophole in the $10,000 rule if the transaction takes place at a coin show rather than at the store itself.
posted by MasonDixon at 9:51 AM on April 14, 2006