Financial Advisor Russ Jalbert Discusses What You Should Know Before You Buy Gold
Southfield, MI – March 4, 2013 – Russ Jalbert, President of Jalbert Financial Group, recently discussed the difference between reportable and non-reportable gold investment and why the distinction is important. Mr. Jalbert explains:
There are tax consequences to getting this wrong and there are other government issues to consider. The key discussion should be: What is a reportable vs. a non-reportable commodity purchase? Gold & Silver Bullion of any size is a REPORTABLE commodity. So, if you are fearful of the economy, or a possible future demise of the dollar, this money is “on the radar.”
In 1933, the U.S. dollar was convertible to gold, rendering the government incapable of printing more money, as it is apt to do today. With fiscal discipline enforced by this convertibility, our faithful politicians (even back then) did the next best thing — they promptly confiscated American citizens’ gold, via executive order 6102 (signed by Franklin Delano Roosevelt), while remunerating them for the then-fair market value of $20.67 an ounce. Upon the successful completion of its gold confiscation, the U.S. government adopted the Gold Reserve Act in January 1934, which revalued the nominal price of gold from $20.67 to $35.00 per troy ounce. What a risk-free profitable trade for the federal reserve!
Mr. Jalbert continued by providing an anecdote explaining why it’s important to ask whether a purchase is reportable or non-reportable:
Let’s say you have a shady seller who sells you a 32.15 oz Johnson Gold Kilo Bar for $56,100 today and does NOT report it as required. Five years later gold hits $5,000 an ounce (awesome for you !), BUT that dealer is gone. With more governmental enforcement, all buyers of gold will report (because they will face this same tax nightmare on their purchase if they don’t) and they enter you into the system with a $160,750 sale. What’s your capital gain?
Since you “worked” the system and stayed off the radar by getting a seller to not report; your basis is $0.00 Now when you sell you are taxed on a $160,750 gain – this is NOT subject to debate – this is fact and it is easily researched – you’ll pay 20% (or, the then current capital gain tax rate). Buying reportable commodities sets you up for tax scrutiny (FYI, I am not suggesting you buy non-reportable metals to avoid taxes – you are subject to gains and losses, but, the record keeping is your responsibility).
In addition, as you can see from above, the government tracks reportable commodities and the last go around proved that the seller (the American public) got a lousy deal. Does it make sense to buy gold coins? Please don’t hesitate to contact me to help you understand your best options!
For more information on this topic, or to learn how Russ Jalbert can help, please visit www.jalbertfinancial.com.
About Russ Jalbert:
Russ Jalbert, CFP, has been a top financial planner for nearly four decades. During that time, he played an active role in the Reagan Administration and amassed an impressive list of accolades.
America’s ‘Dean of Financial Planning,’ Jalbert now points his clients to the solace of much safer products and approaches, and his record speaks for itself. When the market began its ascent in 2003, Jalbert’s clients were enjoying returns of five to seven percent, growing steadily but not as fast as the market from 2003 to 2007. When the market plummeted in 2008, losing half its value and causing panic, Jalbert’s clients didn’t lose a penny.
As if all of these accomplishments were not enough, Jalbert is also an accomplished radio personality and author. The Jalbert Financial Forum airs on WMUZ 103.5 Saturdays from 2 to 3 p.m. He also hosts a show on WJR 760 AM On Sundays from 2-3:00 PM.
Jalbert has also written several books covering a wide range of issues. His first book, “Giving: Philanthropy For Everyone,” was published in 2003 and raised $125 million. His most recent book, “Rescue Your Retirement,” offers readers all of the new methods and strategies that are keeping his clients in good fiscal health.