At JM Bullion, we prideourselveson maintaining the privacy of our customers. This being said, although we do not reportthe majority of our customers’ sales to the government, we are legally obligated to file a 1099-B form when these sales apply to certainproducts or exceed aparticular amount.Failure to report such sales could result in bothcivil and/or criminal taxpenalties, as well as thepossibility of imprisonment.
It is important for customers to understandthat while the 1099-B form will require us to provide the some of the seller’s basic information, such as address and phone number,this information remains strictly betweenJMBullion and the IRS. No other third parties will have access to this information.Customers,who would like to learn more aboutprecious metals reporting policies, arestrongly encouraged to either visitIRS.govor consult with a professional tax expert.
1099-B Requirements
The criteria for reporting precious metals sales will depend upon a number of factors including product, purity, and quantity. Each of which will be discussed in further detail.
Product
When determining whether or not to report a sale, we first have to verify which particular products are being sold since certain pieces of bullion are exempt from reporting. Among the coins that are subject to reporting are 1 oz Gold Maple Leaf Coins, 1 oz Gold KruggerandCoins, 1 oz Gold MexicanOnza Coins and anyUS coin composed of 90% silver. All bars and rounds are also subject to reporting regardless of size and precious metal composition. However, there are some restrictions with regard to the purity of each bar or round.
Purity
Another determining factor in whether a sale is subject to reporting is the purity or fineness of each particularbullion piece.Because the purity of coins is dictated by their inherent designs, there are no purity restrictions for thecoins mentioned in the previous section. In the case ofbars and rounds, however,the purity criteria will vary according to the item’sprecious metalcomposition. Only sales onbars and rounds possessing the following compositions andpurity levels will be subject to reporting: agold fineness ofat least.995; a silverfineness of at least.999; aplatinum fineness of at least .9995; and apalladium fineness of at least .9995.
Quantity
The final step is to determining whether a precious metal sale needs to be reported is to evaluate the quantity being sold. We are required by law to report allsales of 90% silver US coins exceeding a face value of $1,000 as well as sales of the previously mentioned gold coins, where more than 25 pieces have been sold. As with purity, the qualifying quantities for precious metal bars and rounds will vary according to theirprecious metal composition. Sales of gold bars and rounds need to be1kilo (32.15 troy ounces) or more before we need to report them. Likewise,sales of silver bars and rounds mustreach 1,000 troy ounces. Lastly, sales of palladium bars and rounds need to be at least 100 troy ounces before they require reporting, while sales of platinumbars and rounds need to beat least25 troy ounces.
Exemptions
Sales in which any of the previously mentioned items fail to meet the required purity or quantity criteriawill not be subject to reporting.In addition to these such cases, there are a number of precious metal coins that are exempt from government reporting regardless of their sales quantities. These pieces include, but are not limited to gold coins of fractional denominations; AmericanGold and Silver Eagle Coins;UScurrency created after the establishment of the IRS’s Reportable Items List and anyforeign currency pieces not explicitly mentioned in the above section.
Why Does This Law Exist?
These laws regarding reporting precious metals were established by the IRS during the 1980’s as a means of keeping track of any profits made by non-corporate sellers. They are primary fortaxationpurposes. Theypreventindividuals from using precious metals sales as an unreported source of income.
For more information on reporting bullion transactions, please see our Reportable Bullion Transactions Infographic and the video below.
All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.
