Coin dealers are up in arms against a new tax reporting regulation, which will go into effect starting Jan 1, 2012. The 1099 form, which we get for information on stock and interest earnings will now be used for any purchase of goods and services that exceed $600 per year. If you want to sell your 1921 Walking liberty half dollar for $700 to the local coin dealer, you will have to identify yourself with name, address, and social security number. The dealer will have to mail you a 1099 form, with a copy to the IRS. You will then need to pay your capital gains tax on the coin, which of course you were going to do anyway. Arguing that income for the sale of coins is underreported, the government expects to collect an additional 17 billion dollars in taxes over ten years.
Most concerned about the bill are the small coin and bullion businesses. With the sale of a single ounce of gold easily exceeding the reporting threshold, many small businesses which buy gold primarily from individual citizens may be required to submit thousands of 1099 forms each year.
Where does this new regulation come from?
Would you believe that it is in the Patient Protection and Affordable Health Care Act (more commonly known as the “health care bill.” Although the bill is designed to improve the health care of Americans, it is already giving the gold dealers high blood pressure.