When you buy gold coins and silver coins, not only are you making a wise investment, you may be saving yourself some money. Favorable taxation of either or both of these coins is afforded to investors in the U.S. and around the world. Taxes are a major issue with many types of investments but fortunately, not these coins.
In the European Union, the trading of gold coins is exempt from the consumption tax referred to as VAT, or value added tax. The same preferential treatment is not offered to silver coins, which are subject to a non-recoverable VAT. Ireland has no VAT on coins, whether they be silver or gold.
In the U.S., gold and silver are classified as collectibles, and any loss or gain from their sale is generally classified as a capital loss or gain. The tax rate that applies to a net capital gain is generally lower than the tax rate that applies to other income. The capital gain from the sale of a collectible that is held for longer than one year is 28 percent.
Another advantage to investing in coins is that taxes on rare coin profits need not be paid until the coins are sold. Investors can even take these coins to a bank, borrow money against them, and deduct any interest expense from their tax liability. This is unlike a CD or T-bill, on which investors must pay annual taxes on the interest.
Another positive aspect is that the federal 20011 Economic Growth and Tax Relief Reconciliation Act (EGTRRA) provided a ten-year exemption from estate taxes. Rare U.S. gold coins are assets that can be provided and held in a trust eternally. Any coins purchased for children, even those in the investor’s possession at time of death, are considered the property of the children and are not included in the estate.