In the United States, a few federal government agencies track the movement of physical gold and silver. These include the United States Mint, tasked with producing coins, and the Bureau of Engraving and Printing (BEP), which prints paper currency for coins. Several private mints contract with the Federal Government to produce products such as commemorative coins and bullion. These mints are assigned their serial number ranges, and the government tracks all of the gold and silver they have. Although the government does track gold and silver purchases for coins, it is not a requirement to report those purchases at any time. Reporting your holdings is not mandatory, although you may voluntarily report your holdings on an annual Capital Gains Tax Return.

Gold Purchase Tracked By Government

1. Laws Concerning Gold Purchases

Several laws require reporting gold purchases, but none are concerned with your holdings. There are laws that concern fraud and money laundering, and these laws apply to the purchase or sale of physical gold as well as any other valuables. For example, if you buy $10,000 in gold and sell it at a profit the next day, you must report this transaction to the federal government and pay taxes on the gains.

2. Criteria a Gold Purchase Must Meet

A gold purchase must meet several criteria to be reported to the government. First, you must buy or sell physical gold valued at $1,500 or more in any transaction. Also, you must say this as a “reportable transaction,” meaning it was not an exempt transaction. The following are examples of exempt transactions:

• Transactions that are between family members and spouses.
• Transactions between domestic partners and members of their household.
• Transactions made between partners of the same business partnership.

3. When a Gold Purchase Must Be Reported

In addition to the price and the nature of the transaction, there is also a period that must be met before a transaction has to be reported. The client must have actual knowledge of the purchase and sale, or they must have received a written statement from the other party in the transaction informing them of the amount sold/purchased. This written statement must include instructions for reporting this transaction to government authorities. If these rules are not met, then no trades for that particular year need to be registered.

4. Reporting the Gold Purchase

When a gold purchase does need to be reported, the report can come in one of two ways. First, you can call the FinCEN, an office of the US Treasury, and request that they examine your records. This office will send a letter to you within 30 days indicating whether they consider your transaction to be re-portable or not. Second, you can file with the IRS using their FBAR form.

5. Taxes on Gold Purchases

If a gold purchase is reportable, the purchaser would have to pay taxes upon selling that gold. This tax payment would be made with the Federal Capital Gains Tax Return. It is a form that must be filed every year, regardless of whether or not you have any capital gains or losses. If you have capital gains, you have to report them and pay taxes upon them. The amount you pay depends on whether these gains are short-term or long-term. Short-term gains include any profits gained within a year and are taxed at your regular income tax rate. Long-term gains are those that have been held for a more extended period and are taxed at your capital gains tax rate.

6. When a Gold Purchase May Not Need to Be Reported

You may be concerned that you will have to report every gold purchase you make. However, this is not always the case. It does not have to be reported as long as the gold stays in your possession and means of ownership, such as within your home or in a safe deposit box. If a bank holds the gold for safekeeping, it does not have to be reported. However, if the bank sells this gold for you, the sale is re-portable.

7. Private Mints – Government Serial Numbers

You may wonder how it is possible to tell government minted gold from privately minted gold. If a jeweler inspects the metal, they should be able to determine whether or not it was made in a United States Mint facility. However, most investors do not take this extra step. The simplest way to know that you are purchasing government-minted gold is by its serial number. To stamp any gold coin with a United States Mint mark or serial number, the gold must first be purchased from the US Mint.

Final Verdict

When you buy gold, your purchase is not tracked. As long as you do not buy or sell more than $1,500 in gold in a single transaction, you do not have to report this transaction in any way. Simply filing an income tax return at the end of the year will not trigger a review of those transactions. However, if your gold purchase exceeds $1,500 and falls into another category, such as a gift or inheritance, that transaction may need to be reported and taxed.