Tax considerations?

Hello everyone, I'm new here, but then who isn't I suppose. Was wondering if anyone could help with a few concerns about taxes and bitgold.

How does tax on bitgold come into play? If gold is bought at different prices, what price is used for tax purposes? Does the tax currency chosen for an account matter? Are members provided with a taxable earnings document in time for tax preparation? And does it matter if our vault is in a country other than our residence?

Thanks if you can help clarify any issues related to tax and bitgold.

Mike

Answers

  • GoldIsCurrencyGoldIsCurrency Posts: 1,808 Gold ✭✭✭✭✭
    @mic2020 The way BitGold's Aurum platform works it keeps track of every purchase and every redemption so they maintain a running of your gains and losses to make it effortless for tax preparation.

    https://www.bitgold.com/safety-security

    Promoting Tax Compliance
    Spending Gold or transacting in gold is not illegal, it has just been challenging to record for taxes historically given gold being a physical metal. Spending gold is essentially a sale of gold to the person initiating the transaction with the value of the gold at the time being recorded in local currency value. To the person on the receiving end, the value of gold in local currency must be recorded as revenue. BitGold provides our users with tools that do this effortlessly while also maintaining a running account of your "Gains and Losses" every year for gold vs. your legal sovereign currency. This allows you to legally transact and save in gold while paying any taxes on the gains.
  • 79Au19779Au197 Posts: 4,047 Gold ✭✭✭✭✭
    @mic2020

    It depends on the country you live in (pay taxes in). I can only speak for the US. First take a look at the following thread

    http://community.bitgold.com/discussion/comment/2358#Comment_2358

    this concerns the reporting requirement for foreign assets in excess of US$10,000. This is in addition to capital gains taxes. Note that I am not a tax expert, just a guy with mad googling skills B)

    You are required to pay taxes on capital gains. The BitGold tax tool is apparently not available yet. One nice thing about gold is that the wash sale rule does not apply to "collectibles".

    http://www.tradersgame.com/articles/taxing-gold.html
    Gold, silver and other metals in physical form

    As mentioned above, gold, silver and other physical metals (along with vintage wines, stamps, artworks and antiques) are classified by the IRS as “collectibles”. If you held the investment for a year or less, the gain is short term capital gain and is taxed at ordinary income rates. If you held the asset for more than a year, the gain is long term capital gain and is taxed at the special long-term rate for collectibles, currently 28%. The form of physical metal you sold is irrelevant. Gains on gold coins, bars, “gram gold accounts”, and gold certificates are taxed as gains on the sale of collectibles. Even exchange-traded funds (ETFs) that own physical metals are taxed as collectibles.

    The wash sale rules, that prevent you from taking a loss and then immediately repurchasing a security, do not apply to collectibles, so that you can a take a loss and then repurchase the metal immediately.


    For more than you want to know see … https://www.irs.gov/pub/irs-pdf/p550.pdf

    Any questions? >:)
  • 79Au19779Au197 Posts: 4,047 Gold ✭✭✭✭✭
    PS … @mic2020 … Welcome aboard!
  • rohanibuang61rohanibuang61 Posts: 2,379 Gold ✭✭✭✭✭
    Hi and wellcome @mic2020
    As per to my country and most Asian region, we don't have to look into tax consideration
    but if you are talking on USA, then I think @79Au197 is right and applies
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