Precious metal investors need to be aware of both the tax implications and cash reporting requirements associated with their precious metal transactions. The IRS has two stipulations in which precious metals dealers are legally obligated to report precious metal transactions. The first is when a customer sells a large quantity of specific bullion products and the second is when a cash transaction meets or exceeds $10,000 in cash. Failure to comply with federal regulations can result in fines, criminal charges and even prison if the violation is severe enough. There are two designated federal forms that precious metal dealers must complete when transacting either of the two previously mentioned scenarios.They are the 1099-B (Proceeds from Broker and Barter Exchange Transactions) and form 8300 (Report of Cash Payments Over $10,000 Received in a Trade or Business).
The 1099-B form is required when certain amounts of specific precious metal products are sold to a dealer by non-corporate customers. This form in essence notifies the IRS of large bullion transactions for the prevention of any tax evasion by keeping track of individuals who may be selling precious metals as a source of income. Dealers are required to fill out a 1099-B form when a non-corporate customer sells any precious metal products mentioned in the IRS's Reportable Items List (see below). The reporting criteria is primarily determined by the purity and the quantity of products being liquidated.
- Silver Bullion (.999) - 1000 troy ounces or more in silver bars/rounds regardless of size.
- Junk Silver (90%) - $1,000 face bag in any combination of dimes, quarters or halves.
- Gold Bars & Generic Gold Rounds - Totaling 32.15 troy ounces in weight or more.
- 1 oz. Gold Maple Leafs - 25 troy ounces or more.
- 1 oz. Gold Krugerrands - 25 troy ounce or more.
- 1 oz. Gold Mexican Onzas - 25 troy ounce or more.
- Platinum Bars (.9995) - Any size bars totaling 25 troy ounces or more.
- Palladium Bars (.9995) - Any size bars totaling 100 troy ounces or more.
- American Eagles (any size in gold or silver)
- American Gold Buffaloes
- Australian Perth Mint Products
- Austrian Philharmonics (gold or silver)
- Canadian Silver Maple Leafs
- Chinese Pandas (any size in gold or silver)
FinCen Form 8300
In the 1980's the 8300 form (also known as a Cash Transaction Report or CTR) was introduced by the federal government to manage cash activities that could financially hurt the U.S. Government. After September 11, 2001, the U.S. department of Homeland Security implemented stringent requirements involving all cash transactions exceeding $10,000 to assist in the management of money laundering activities. The FinCen (Financial Crimes Enforcement Network) under the Department of the Treasury dictates that precious metal dealers are required to report cash payments received for a single transaction of $10,000 or more or multiple transactions by the same person within a 24 hour period of $10,000 or more. In order to report the receipt of such payment, precious metal dealers are required to fill out an 8300 form.
So that there is no misunderstanding, "cash" is defined as U.S. currency (paper or coin), foreign currencies and when less than $10,000; traveler's checks, cashier's checks, money orders and bank drafts. Forms of payment that are not considered "cash" include personal checks, bank wires, credit/debit cards, PayPal and ACH transfers.
We are in full support of all federal, state and local laws governing our business at all levels. We will actively support and work with all officials in providing the mandated information as it is currently written. We will not jeopardize our business or reputation by providing any third party a platform to be deceitful or unlawful. However, all business transactions and reporting are done with complete confidentiality and in accordance with federal laws. Furthermore, we will never sell any customer information to any other persons or companies.