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Some of you may have previously purchased precious metals at higher than current market values. You can take a tax loss and still keep your precious metals through what is called a precious metals tax swap. Precious metals are not governed by the "wash sales" rule for securities (IRS CODE, SECTION 1091). So, you can sell your metals and immediately repurchase the same merchandise you originally purchased at the current market prices. Normal spreads, commissions and fabrication charges, i.e., manufacturing costs, could make this sale and subsequent repurchase cost prohibitive. However, ASI offers a preferential commission of 2%, plus shipping, for bullion-related transactions and a 4% commission, plus shipping, for numismatics. With other companies who do not have a program like ours, you can easily see an evaporation of capital amounting to 8-10% if you sold your metals and simultaneously repurchased them. The timing to maximize your tax loss is when the markets are at the low end of their trading ranges, not necessarily at the end of the tax year. The time to take advantage of a Tax Swap is when market values of precious metals are lower than when purchased, not necessarily at the end of the tax year. When prices are low, you have 3 choices:
Even if you don't need this tax-saving capital loss in the current tax year, you are permitted to use $3,000 per year and roll the remainder forward to the next year. The TAX SWAP is an excellent strategy for those of you who hold precious metals or numismatics and want to save money on taxes. If you would like the opportunity to discuss this strategy in greater depth with an ASI representative, click here.
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