Money Metals president Stefan Gleason appeared today in a special interview by Tom Bodrovics of Palisades Gold Radio to discuss taxation of precious metals by the IRS, state and federal laws, premiums and minting challenges in the physical bullion market, and much more.
The Sound Money Defense League, the public policy project backed by Money Metals Exchange, just released the Sound Money Index for 2021, ranking all U.S. states based on their sound money policies.
The biggest scoring factors in the Sound Money Index are whether each state assesses sales or income taxes on gold and silver.
Sound money forces – aided by grassroots action by precious metals investors – have recently secured passage of two new sales tax exemptions in Ohio and Arkansas, leaving just eight states that still fully tax gold and silver.
Additional sound money legislation will be considered next year, including in Mississippi, Tennessee, Kentucky, Hawaii, and New Jersey.
The Sound Money Index also documents other state policies. For example, some states place heavy burdens on local precious metals dealers and their customers. In several states, local coin shops are required to collect detailed customer information and submit it to law enforcement with the supposed purpose of helping investigate or prosecute thefts.
Even as they intrude on the privacy of investors and impose financial burdens on dealers, these “customer and dealer harassment” policies are a big waste of time as coins and bullion are fungible and generally not trackable anyway. In more than a dozen states, local dealers are required to photograph items being sold to them by the public, collect copies of customer IDs, take down detailed notes, and upload such information to government databases.
One state (Arizona) even makes it outright illegal to use cash to buy precious metals — all payments must be electronic and thus traceable.
Also in Arizona, minors are barred from buying gold or silver unless accompanied by a parent tendering an ID card. Taking grandma’s birthday gift of cash down to the local coin shop to buy an ounce of silver bears heavy consequences. Any violations of these or other customer/dealer harassment provisions can be prosecuted as a Class 1 misdemeanor, punishable by up to six months in jail plus a fine!
There is only one state, Texas, with a state-chartered depository system. Tennessee is evaluating the idea of doing something similar to Texas. However, the Volunteer State still has sales taxes on bullion, and a recent Tennessee study urges repeal of that draconian tax before any depository framework is seriously considered.
The best options for secure gold and silver storage remain non-government, private depositories such as Money Metals Depository.
At the federal IRS level, there are recent cases around self-directed IRAs, which usually involve storage at third-party depositories. The government doesn’t like the idea of having gold stored at home inside of an IRA. Some investors are now being audited and having to pay penalties for participating in a “home storage” IRA scheme.
President Joe Biden’s IRS is hiring tens of thousands of new auditors and that will increase the risk of income-tax audits. Accordingly, all taxpayers are urged to be especially careful in documenting their deductions and be diligent about following tax laws.
The U.S. Mint has a congressional mandate to keep up with public demand, but the performance of that government “enterprise” has been a particular embarrassment in 2021, leading to high premiums on American Eagles.
The U.S. Mint over the years has failed to build and maintain a surplus inventory of silver blanks and as such continuously violates its legal requirement to supply the market. Meanwhile, mints like the Sunshine Mint have been unable to keep up with government-mint demand for silver blanks.
All of this combined has led to shortages while pushing up premiums on government silver coins, making privately minted bars and rounds an even better value by comparison. Stefan expects further tightness in the government coin market over the next month or so.
Time Stamp References:
0:00 – Introduction
0:41 – Sound Money Defense
4:05 – Bad Policy States
7:58 – Chartered Depositories
14:42 – Self-Directed IRA Risks
19:56 – IRS Risks & Taxes
24:36 – Treasury Gold & IMF
27:31 – Money Metals
30:43 – Gold Demand & Premiums
34:13 – Gold Investment Vehicles
37:24 – Royalty Plays & Risks
38:53 – Concluding Thoughts
42:57 – Wrap Up
Articles Featured:
Gold and Silver Bullion and Tax Laws in Tennessee
Biden’s IRS Is Mining for Gold
New State Rankings Uncover Dramatic Differences on Sound Money
U.S. Treasury Refuses to Answer Questions about Disposition of Its Own Gold
Stefan Gleason: Taxing Away Your Savings
Tom welcomes back Stefan Gleason. Stefan is president of Money Metals Exchange and Director of the Sound Money Defense League.
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They rank the U.S. States based on their sound money policies. The biggest factor is sales or income taxes on gold and silver. They have recently got two new exemptions passed in Ohio and Arkansas. They have additional legislation that they hope will be passed next year.
Some states like Arizona place heavy burdens on the retail dealer and the customer. They require a lot of information on sellers to solve crimes. Much of it is a waste of time as coins are only occasionally trackable. In some cases, they are required to photograph items and submit them to the government.
There is only one state Texas with a state-chartered depository system. Tennessee is evaluating the idea of doing something similar to Texas. However, they still have sales taxes on bullion and will need to repeal that tax first.
At the Federal IRS level, there are cases around self-directed IRAs and bullion. The government doesn't like the idea of having gold stored at home outside of an IRA. Some investors are now being audited and having to pay penalties.
Biden is hiring a lot of new auditors for the IRS and that may increase the risk of audits. Stefan gives some specific recommendations regarding deductions.
The U.S. Mint is supposed to keep up with public demand but this year their performance has been quite lackluster. Mints like the Sunshine Mint have been unable to keep up with the demand for blanks. All of this combined has caused premiums to rise on government coins. He expects further tightness in the markets over the next month or so.
Stefan views gold and silver as money and also believes in investing in royalty companies. Firstly, everyone should hold physical gold and silver. Miners come with an excessive number of risks where royalty companies don't share that level of risk.
Time Stamp References: 0:00 - Introduction 0:41 - Sound Money Defense 4:05 - Bad Policy States 7:58 - Chartered Depositories 14:42 - Self-Directed IRA Risks 19:56 - IRS Risks & Taxes 24:36 - Treasury Gold & IMF 27:31 - Money Metals 30:43 - Gold Demand & Premiums 34:13 - Gold Investment Vehicles 37:24 - Royalty Plays & Risks 38:53 - Concluding Thoughts 42:57 - Wrap Up
Talking Points From This Episode - Promoting sound money at the state level. - State gold depository systems. - IRS Tax regulations and self-directed IRAs. - Gold demand and speculative Royalty Plays
Stefan Gleason is President of Money Metals Exchange, a national precious metals investment company and news service with over 500,000 readers and 250,000 customers. He launched the company while president of a national newsletter publishing company dedicated to helping subscribers protect their freedoms, assets, and privacy.
Gleason founded Money Metals Exchange in 2010 in response to the abusive practices of national advertisers of "rare" coins. These companies often mark up their coins to 50%, 100%, or even higher than their actual melt value. Money Metals believes the average investor should only purchase precious metals at or near their true melt value. The rare coin market is only suitable for highly experienced collectors with money to blow.
Gleason also leads marketing, publishing, and real estate holding companies and legislative projects involving sound money and the precious metals industry. Previously, Gleason served as Vice President of the National Right to Work Legal Defense Foundation in Springfield, Virginia. Gleason is a graduate of the University of Florida with a BA degree in Political Science.
Gleason has frequently appeared on national television shows and networks such as CNN, CNBC, Fox News, Christian Broadcasting Network, and C-SPAN's Washington Journal. He is often interviewed on national radio shows such as the Lars Larson Show, Michael Reagan Show, G. Gordon Liddy Show, and Ken Hamblin Show. Gleason's analysis and commentary have appeared in The Wall Street Journal, TheStreet.com, Seeking Alpha, Investing.com, Newsweek, and National Review, among thousands of other national, state, and local newspapers, wire services, and Internet sites.
