During the 1980’s the government introduced legislation that required consumers to report certain kinds of purchases and cash transactions. Both the Broker Reporting Act of 1982 and the Gold Bullion Coin Act of 1985 affect numismatists and precious metals investors, because they govern bullion purchases and transactions using precious metals.
A “commodity” is any raw material used by an industry or traded in a specialized market. Because gold, silver, palladium, and platinum are sold as commodities, they may be subject to reporting laws under the Broker Reporting Act of 1982. Consumers must report the purchase of the following products to the IRS:
Collectors and investors should note that it is their responsibility to report qualifying purchases. It is not necessary to report the sale of these precious metals products. Many potential investors worry that the IRS will use this data if gold is confiscated, but there is currently no legislation that enables precious metals confiscation from private investors.
It is also important to know that the legislation does not include any clause regarding numismatic coins. Moreover, the only coins officially designated “numismatic” by the government include gold and silver American Eagles.
Signed into law by Ronald Reagan, the Gold Bullion Act of 1985 made domestic gold available for the mint of gold coins. The Act also states that these coins can be used as legal tender at their face value. The Gold Bullion Coin Act led to the launch of the American Eagle program, with gold coins minted in $5, $10, $25, and $50 denominations.
Ultimately the Gold Bullion Coin Act and its counterpart the Liberty Coin Act not only improved American numismatic coinage, but they also stimulated investors with the promise of high-quality products for investment.
Coin collectors and investors who learn the legal requirements for the purchase and ownership of gold and silver bullion products will reap added benefits. In the future, legislation will undoubtedly define “numismatic” coins more specifically and to further guide coin investment choices.
This information is provided for general reference purposes and does not constitute professional advice. For detailed coin collecting or investing information, please consult with a professional expert.