How about a tax break? Given that gold and silver spot prices have muddled around their four year lows, despite the small rally late last week. It probably doesn’t put a smile on your face, but it DOES present a great opportunity!
Our tax-savvy clients are doing strategic planning for some significant tax deductions by selling paper investments that have gone down in value and buying physical metals instead. Better yet, they are buying the metals at sale prices.
Year end is approaching, and the stock market might be entering a bear phase. Now may be a time to consider selling losing investments in equities, precious metals ETFs, metals futures contracts, or even mining shares and deducting the paper losses.
IRS rules allow singles and married people filing jointly to deduct up to $3,000 per year in capital losses (and more if you have other capital gains which can be offset). Losses above the limit can be carried forward to future years.
Investors can take the proceeds from the sale of these assets in their brokerage or futures accounts and simultaneously use them to buy bullion coins, rounds, or bars. You will avoid IRS wash-sale rules because physical bullion is not a security or a stock. Check sec.gov for the details.
Remember to consult your CPA or licensed securities professional for specific tax or investment advice.
All Things Considered – John’s Commentary:
Our preferred swap that may produce the best returns overall is a trade of paper gold investments for physical silver bullion. Silver is currently undervalued relative to gold with the gold:silver ratio 70.84:1.
If you are in a position of loss with a mining share or gold ETF, consider physical silver to lock in tax advantages, reduce risk and position yourself for future silver growth.
Click here for our article on swapping metals using the Gold:Silver Ratio, another strategy we use to gain more metals without incurring additional cost.
