What do I do with this gold?
April 15, 2023 11:33 AM   Subscribe

What do I do with this gold? Several decades ago I began buying the occasional gold bullion (Eagles, Krugerrand, etc.) I thought they would be a good investment and inflation protection. I did this for a few years until the price rose past what I felt like paying. Now I could use the money and would like to start cashing some of the coins in but I am unsure how to do it.

I had not foreseen the advent of the cashless economy. I cannot cash the coins in and deposit them in a checking account because the bank has to report large deposits. I'm considering just cashing one or two at a time and using the cash for day to day expenses. But that is no help when it comes to paying bills or large purchases. I'm not sure what the tax implications are and have found no reliable advice on the problem. My tax man is useless and has no idea. Any informed advice or suggestions would be great.
posted by charlesminus to Work & Money (10 answers total) 2 users marked this as a favorite
You can deposit as much cash to bank accounts as you want. You just have to report the source of the cash, which seems to be very simple in this case (I sold gold bullion).
posted by zeikka at 11:47 AM on April 15, 2023 [4 favorites]

Take your gold (or silver, or platinum) bullion coins to the nearest coin shop. You'll receive current price (in cash) minus 2-3% commission. Tax is not an issue when selling. (Maybe not even when buying; there's fat-cat-friendly laws out there which waive sales tax on bullion purchases above some threshold.) You can also do these deals at numismatic (coin) shows; maybe get a better deal because of several dealers in one room.
posted by Rash at 11:47 AM on April 15, 2023 [1 favorite]

Why can't you deposit the cash into a checking account? Are you talking hundreds of thousands of dollars? Then there'd be some issues. But the gold is legally yours, and I don't see why there can't be some way to deposit the cash. Sell the gold to a gold dealer and keep the receipts. You could still deposit the money, but the bank would probably have to report it.

Why not go to your bank and tell them your story. They will know what to do. This has to be fairly common unless the amount is staggeringly high.
posted by SoberHighland at 11:52 AM on April 15, 2023 [1 favorite]

Whenever I've purchased bullion I've done so from eBay so you might look into selling there.

Also seconding that you can deposit as much cash as you want into a checking account. It won't affect your tax status, you'll just be asked where it came from.
posted by mezzanayne at 11:52 AM on April 15, 2023

What is wrong with reporting the proceeds? It sounds like you're asking how to launder money, which is a different question than how to cash out your physical holdings in gold.

For tax purposes, sales like this are taxed as capital gains, so you'll pay the capital gains rate. Like other capital gains, the taxable amount is calculated by subtracting your basis from the sale price. It sounds like you've held your gold for more than a year, so you'll get favorable tax treatment.
posted by vathek at 11:53 AM on April 15, 2023 [4 favorites]

More about precious metals and capital gains tax implications here. (As an aside, I would be concerned that your tax guy doesn't know this.)
posted by paper scissors sock at 12:01 PM on April 15, 2023 [1 favorite]

Response by poster: Didn't make my question clear. I don't remember what I paid, plus I paid different prices over several years. So I'm trying to figure out worst case scenarios. Thanks for all the advice but I do know how to sell gold.
posted by charlesminus at 12:11 PM on April 15, 2023 [1 favorite]

Oof, the lack of record-keeping does make it more difficult. You're going to need to estimate the cost basis. Do you know the dates you purchased the gold, or can you figure them out from old bank statements etc.? If you know the date (even the approximate date) you purchased a Krugerrand, e.g., you can look up historical prices and make a pretty good estimate of how much you would have paid for it.

Keep records of the calculations you make (and any supporting material, like if you can correlate a withdrawal on a bank statement with a gold purchase) so that you have them handy if/when the IRS asks you to show your work.

It's going to be a real pain in the ass, sorry!

If you want to give away some or all of the metals (either to a person or to charity) that's actually a lot easier, tax-wise, so if you were planning any major gifts that might be a way to avoid the basis estimations (and the capital gains taxes).
posted by mskyle at 12:29 PM on April 15, 2023 [4 favorites]

JM Bullion has the basics: Capitol Gains and Taxes on Precious Metals Income.

(I used to work in a bullion shop and this is where we would direct people).
posted by oneirodynia at 5:27 PM on April 15, 2023 [1 favorite]

Response by poster: Thank you oneirodeynia. I've been looking for just this kind clear explanation. I think I can work with this.
posted by charlesminus at 5:37 PM on April 15, 2023

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