Financial Advisor Steve Sexton Discusses What You Should Know Before You Buy Gold
San Diego, CA – March 1, 2013 – Steve Sexton, President of Sexton Advisory Group, recently discussed the difference between reportable and non-reportable gold investment and why the distinction is important. Mr. Sexton 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. Sexton 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!
Do you know the questions to ask to make sure you are basing financial decisions on all the facts and not emotions, misconceptions, sales pressure or opinions? Identify all of the facts necessary to make a sound financial decision before you make that decision by visiting www.sextonadvisorygroup.com to learn more about Steve Sexton and his unique process to make sure your financial decisions are made in your best interest.
About Steve Sexton:
Steve Sexton has over 15 years of experience in the financial services industry and holds multiple licenses and designations. His company, Sexton Advisory Group has grown steadily over the last eight years and has seven offices serving Riverside and San Diego Counties.
Sexton is a well-known media expert and has been asked to appear on a variety of Southern California media over the past three years to share his expertise. Steve hosts “Winning In Life Radio with Steve Sexton on 1170am KCBQ and Ch6 CW Daily Living Show” Money Minute” segment in San Diego, Ca.
Sexton also works with many charities. He has sponsored special events for various charities, such as A Salute to the Military, benefitting Pat Boone’s Ryan’s Reach charity, events for Hospice of the Valleys and many more.