Kelly Bullis
These days, I hear quite a few of my clients telling me that they have purchased some precious metals (coins, bullion, etc.). There is an obvious problem that many folks have, that being, “OK, so I purchased some gold coins, where do I store them?” Turns out the answer is not as easy as it may sound.
You are faced with storing an item that is considered “negotiable.” That means the holder is presumed to have title. Thus, if somebody steals your coins, it would not be very hard for them to sell them. Therein lies the problem of storage: If you make it too easy for somebody to take your gold coins (or silver coins, or bullion, etc.), you are inviting theft to happen.
There are several options available to consider. One is to use a third-party storage service. Unfortunately, there are not any close by, so if you need your gold, it would be difficult to get it, minus some hefty storage and handling fees, as well as a considerable amount of time passing from when you ask for your gold to when you get it.
Another option that works especially for small quantities of coins, is your local bank safe deposit box. Obviously, secure, but usually not insured if somebody breaks into the bank. It is easier for you to access than a third party out-of-town storage service, but still limited to certain office hours and days.
One popular option is to purchase a safe and store it in your house. A great idea from a simple access perspective. Assuming the safe is large enough, making it difficult for the thief to carry off the safe, but not impossible for them to crack it open. Be careful about what combinations you choose and where you store it. Maybe, put the combination in your safe deposit box?
The final solution is to bury your gold somewhere. Preferably on property you own. (Remember the old saying, “Finders keepers, losers weepers”?) Understand that with modern metal detectors, it would be difficult to really hide any precious metal if somebody knows to go looking for it. If you bury your gold, make sure you take precautions to protect it from scratching, dings, etc. (especially those coins). Also, maybe put a map in your safe deposit box?
What’s the tax hook to this article? Remember when you sell any precious metal (in coin or bullion form), it is a taxable event. So, keep good records of what you paid for it, storage costs, commissions, etc., and what you sold it for as well as all the costs of selling. The net difference would normally be considered a special category of capital gain-type sale (higher maximum tax rate of 28%). Talk to your CPA before you buy or sell precious metals to make sure you understand all the tax consequences.
Have you heard? Psalm 4:8 says, “I will both lie down in peace, and sleep; For You along O Yahweh, make me dwell in safety.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 775-882-4459. On the web at BullisAndCo.com. Also on Facebook.