Keith Fitz-Gerald from MoneyMorning.com wrote a negative article on gold yesterday called Warning: You May Not be Making as Much on Gold as You Think.

In this article Fitz-Gerald was trying to “warn” gold investors by trying to rain on their parade about all the taxes they would have to pay on their gains.  This negativity may convince some not to invest in precious metals, so I made a comment to his post telling the readers of MoneyMorning that there are solutions available to avoid paying taxes on the gains one has made on gold.

So far my comment hasn’t been posted. EDIT:  The comment has now been posted, #18.

Fitz-Gerald wrote;

Unbeknownst to most investors, gold is considered a collectible not a capital asset. In plain English, this means that despite the fact that many people believe they are investing in gold, the Internal Revenue Service (IRS) believes that they are collecting it.

Precious metals are a completely different story. Profits from these “investments” can be subject to a 28% maximum tax rate if held for more than 12 months. And if they are sold in less than a year, the profits count as ordinary income.

While it is true there are higher taxes on the gains in investments in gold than stocks or real estate, there are solutions for investors in precious metals.  I posted to the MoneyMorning article where investors can find these solutions in his comment section but it has been about 24 hours and my comment is still “awaiting moderation.”

There was also a comment (#6) by a poster named Dave that I referenced as misleading.  Dave’s comment was;

Isn’t one sure way to avoid these tax troubles is to take physical possession of the gold instead of buying the paper.

That’s what I did and I don’t regret that one bit.

Here is a screen shot of my reply to Keith Fitz-Gerald from MoneyMorning;

How Can One Sell Gold Without Paying the 28% Tax on Capital Gains?

I give details on how to do it in my book “Buy Gold Safely” as mentioned in the comment above, but I’ll let you know the “what” here.

What you need to avoid the 28% tax on your precious metal capital gains is to gift your gold assets to a Charitable Remainder Trust (CRT).

CRT’s are trusts approved under Section 501(c)(3) of the Internal Revenue Code whereby one can gift highly appreciated assets like stocks, real estate, and yes, precious metals too, to avoid the tax one would have to pay in the year they sold.

One cannot sell the asset first and then gift to the trust to avoid paying the tax.   There is a certain order of ownership clarification and gifting that needs to occur for the tax avoidance to be blessed by the IRS.

Disclosure:  I am a former Certified Specialist in Planned Giving (CSPG) and financial advisor for over 20 years.  I don’t sell gold.  I left the industry to write about it and other economic and political issues.

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