Financial Advisor Robert Russell Discusses What You Should Know Before You Buy Gold
Financial Advisor Robert Russell recently explained what every retiree should know about buying gold before purchasing it.
Dayton, OH – March 1, 2013 – Robert Russell, President of Russell & Company, recently discussed the difference between reportable and non-reportable gold investment and why the distinction is important. Mr. Russell explains:
There are tax consequences to getting this wrong and there are other government issues to consider. The key discussion should be: What is a reportable vs. a non-reportable commodity purchase? Gold & Silver Bullion of any size is a REPORTABLE commodity. So, if you are fearful of the economy, or a possible future demise of the dollar, this money is “on the radar.”
In 1933, the U.S. dollar was convertible to gold, rendering the government incapable of printing more money, as it is apt to do today. With fiscal discipline enforced by this convertibility, our faithful politicians (even back then) did the next best thing — they promptly confiscated American citizens’ gold, via executive order 6102 (signed by Franklin Delano Roosevelt), while remunerating them for the then-fair market value of $20.67 an ounce. Upon the successful completion of its gold confiscation, the U.S. government adopted the Gold Reserve Act in January 1934, which revalued the nominal price of gold from $20.67 to $35.00 per troy ounce. What a risk-free profitable trade for the federal reserve!
Mr. Russell continued by providing an anecdote explaining why it’s important to ask whether a purchase is reportable or non-reportable:
Let’s say you have a shady seller who sells you a 32.15 oz Johnson Gold Kilo Bar for $56,100 today and does NOT report it as required. Five years later gold hits $5,000 an ounce (awesome for you !), BUT that dealer is gone. With more governmental enforcement, all buyers of gold will report (because they will face this same tax nightmare on their purchase if they don’t) and they enter you into the system with a $160,750 sale. What’s your capital gain?
Since you “worked” the system and stayed off the radar by getting a seller to not report; your basis is $0.00 Now when you sell you are taxed on a $160,750 gain – this is NOT subject to debate – this is fact and it is easily researched – you’ll pay 20% (or, the then current capital gain tax rate). Buying reportable commodities sets you up for tax scrutiny (FYI, I am not suggesting you buy non-reportable metals to avoid taxes – you are subject to gains and losses, but, the record keeping is your responsibility).
In addition, as you can see from above, the government tracks reportable commodities and the last go around proved that the seller (the American public) got a lousy deal. Does it make sense to buy gold coins? Please don’t hesitate to contact me to help you understand your best options!
For more information on this topic, or to learn how Robert Russell can help, please visit www.theirapros.com.
About Robert Russell:
In only nine short years, Robert Russell has amassed an impressive list of clients and credentials. He often contributes to CNBC, Fox Business, The Wall Street Journal, US News and World Report, and he also co-hosts “Retirement Rescue Radio” on 1290 AM and 95.7 FM WHIO.
Russell is an Investment Advisor Representative (IAR), 2nd generation wealth advisor and member of the Ed Slott Master Elite IRA Advisor Group. He was acknowledged as one of the top “40 Professionals under 40” by the Dayton Business Journal and was honored as a Five Star Wealth Manager – Best in Client Satisfaction by Cincinnati magazine.
Russell is the author of best selling, “Retirement Held Hostage,” in which he outlines several of the strategies that have brought him to the top of his field.
Securities offered through Kalos Capital, Inc., Member FINRA, SIPC. Investment Advisory Services offered through Kalos Management, Inc., 3780 Mansell Rd. Suite 150, Alpharetta, GA 30022, (678) 356-1100. Russell & Company is not an affiliate or subsidiary of Kalos Capital, Inc. or Kalos Management, Inc.
Neither Kalos Capital, Inc. nor Kalos Management, Inc make any endorsements or opinions about the coursework required to become a member of Ed Slott’s Master Elite IRA Advisor Group and as such cannot guarantee the accuracy or completeness within.
A policy change may incur fees and costs, and may also require a medical examination.
This scenario is for illustrative purposes only and does not represent and actual client. Results may vary.