The best way to buy gold and silver.

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doorwarrior's picture
doorwarrior
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The best way to buy gold and silver.

I have been accumulating gold and silver for about five years now. During those years I have purchased from  APMEX, ebay, coin shows  local dealers and other sources. The premiums have varied as have the shipping charges and I have always felt that as the consumer I was getting the bad end of the trade just so the dealers could make big profits. Recently I wanted to trade some of my coins back into FRN's to buy a tractor. I contacted several sources and found that once again the trade was unfair versus spot prices.

I then contacted my local numismatic society to see if anyone was interested in my coins. I was refered to a gentleman that put buyers and sellers together locally for a very small fee. I was very skeptical during the first transaction, always afraid something would go wrong. The deal went as smoothly as possible and he and I have completed dozens of transactions since. Many times I am buying at spot or less. The transactions are always cash which has its own benefits.

If you are looking to buy or sell contact your local numismatic society. As always be careful who you are dealing with.

 

Rich

bluestone's picture
bluestone
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Posts: 263
Re: The best way to buy gold and silver.

Rich

thanks for the post.  this is an interesting alternative to the traditional means of cashing in ones PMs.  Can you further describe the nature of your transactions?  Did you meet the buyer in person in a public place?  Did you only deal with the third party "gentleman" you spoke of"  It is a little bit nerve racking thinking about carrying around a gold piece for a trade.  

Brian

ao's picture
ao
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Posts: 2220
Re: The best way to buy gold and silver.
doorwarrior wrote:

I have been accumulating gold and silver for about five years now. During those years I have purchased from  APMEX, ebay, coin shows  local dealers and other sources. The premiums have varied as have the shipping charges and I have always felt that as the consumer I was getting the bad end of the trade just so the dealers could make big profits. Recently I wanted to trade some of my coins back into FRN's to buy a tractor. I contacted several sources and found that once again the trade was unfair versus spot prices.

Rich,

If you traded back some of your coins into FRNs to buy a tractor, make sure you pay the taxes on the sale or trade of your coins (since it is not a like-for-like exchange) and have a documented cost basis to establish your profit or loss.  When you post in a public place like this, there is a public record of it and if no taxes are paid, data miners may hold you to account.  Also, if you have dozens of transactions, you may want to have dozens of documents to show the IRS since that many transactions in PMs suggests to them that this activity may fall into the category of a business.  Just a heads up for people who do PM transactions without a record ... if you have no documentation for your cost basis, you could wind up being taxed considerably more than the taxes you should actually pay.  It has happened and it will happen again.  Be careful folks.   

Rojelio's picture
Rojelio
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Joined: Dec 27 2010
Posts: 38
Re: The best way to buy gold and silver.

I always thought it was logical to get together with a local group of people and buy/sell/barter simply at spot price.  But then maybe you don't want too many locals knowing you got piles of gold and silver as they could come and kill you for your stash when things get ugly!

Jim H's picture
Jim H
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Posts: 2385
Re: The best way to buy gold and silver.

Just as a reference, Tulving has taken to posting his buy prices for many forms of bullion;

http://www.tulving.com/goldbull.html

I like door's advice though...  

Ayala's picture
Ayala
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Posts: 23
Re: The best way to buy gold and silver.

Excellent advice, DoorWarrior. 

As far as what constitutes records to support your cost-basis with the IRS, do you think email records of the purchase are sufficient? For example, if I have an email from the seller explaining that I'm buying 1 x 1 oz gold American Eagle for $1,420, is that enough or do I need a formal receipt?

Thanks!

doorwarrior's picture
doorwarrior
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Posts: 166
Re: The best way to buy gold and silver.

Thanks for the responses. I just want everyone to see that there are alternatives to the usual dealers.  I remember when I started to buy PM's and had no idea where to start. 

Most of the transactions are carried out at my office or his. He is a registered business and acts in an official capacity. Sorry if I made this sound like a closed door deal, that was not my intent.  He is a small dealer, mostly word of mouth, that keeps a very low overhead and passes it along to his customers.

ao:

You are absolutely correct about the tax implications. For everyone out there please  keep a very clean record of all  transactions.  Also speak with your CPA or whomever you use to make sure you do the right thing.

This was actualy the first time I have sold any of my PM's.  I have always said that PM and firearms are for buying not selling!Smile

Rich

doorwarrior's picture
doorwarrior
Status: Silver Member (Offline)
Joined: Oct 13 2009
Posts: 166
Re: The best way to buy gold and silver.

Excellent advice, DoorWarrior. 

As far as what constitutes records to support your cost-basis with the IRS, do you think email records of the purchase are sufficient? For example, if I have an email from the seller explaining that I'm buying 1 x 1 oz gold American Eagle for $1,420, is that enough or do I need a formal receipt?

Thanks!

I do not know if an email would be considered "official" by the IRS. I also keep a copy of the payment that was sent if I use an large dealer.

Jbarney's picture
Jbarney
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Posts: 233
Re: The best way to buy gold and silver.

Hi Folks,

Forgive me if this is stupid question...

I aligned part of my retirement account by purchasing the Silver ETF...but I would like to do some small things on this front as well, but I am on a very limited budget.  I reread all of Chris's ideas on buying silver and was wondering if anyone else had thoughts on APMEX's cheaper options....the old or damaged coins with holes in them, etc. (The Junk of the Junk I guess)

When things start going down hill...is the quality of the silver going to matter, or is it going to be more important that I have some silver on hand?  Should I make the purchase.

Any thoughts or guidance are welcome.

Jason

doorwarrior's picture
doorwarrior
Status: Silver Member (Offline)
Joined: Oct 13 2009
Posts: 166
Re: The best way to buy gold and silver.

There are many different ways to buy silver. You can buy .9999 fine silver coins, numismatic, bullion, junk or anything in between. Numismatic is for collectors only. One ounce silver dollars are usually .9999 fine but carry a hefty premium. Rounds are usually .999 fine and carry mild premiums. 90% silver or junk silver is the least expensive way to go as you are buying it for melt value only and premiums are very small.

In short yes the quality of silver will matter but that will be offset by paying the lower price today. Your culls will still have value as they are made mostly of silver. They will not be worth as much as a .9999 silver Eagle but they will be a whole lot more valuable than a $100 bill. In a barter situation the weight and purity of the silver will matter more than how it looks. I think that junk silver, bullion and silver rounds are a much better purchase than silver Eagles just because of the premium difference. You get more weight for your dollar.

Please remember this is just my opnion and you should always DYODD!

Rich

ranch's picture
ranch
Status: Member (Offline)
Joined: Dec 2 2010
Posts: 14
Re: The best way to buy gold and silver.

 

doorwarrior wrote:

Rich,

If you traded back some of your coins into FRNs to buy a tractor, make sure you pay the taxes on the sale or trade of your coins (since it is not a like-for-like exchange) and have a documented cost basis to establish your profit or loss.  When you post in a public place like this, there is a public record of it and if no taxes are paid, data miners may hold you to account.  Also, if you have dozens of transactions, you may want to have dozens of documents to show the IRS since that many transactions in PMs suggests to them that this activity may fall into the category of a business.  Just a heads up for people who do PM transactions without a record ... if you have no documentation for your cost basis, you could wind up being taxed considerably more than the taxes you should actually pay.  It has happened and it will happen again.  Be careful folks.   

I am not sure about this, but I think Rich has not revealed his name or address.  Therefore, posting a comment about selling gold bullion creates a public record of an anonymous person who said he sold gold bullion.  Of course everyone is mindful of the IRS, but I doubt this forum will create a tax liability when all he goes by is "Rich".

But the subject of taxation and bullion is a good one.  I have never sold bullion but I keep receipts.  I buy from local shops.  Receipts are handwritten or old-school cash register printouts that don't specify much.   It must be like this in most shops.  

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
Re: The best way to buy gold and silver.
ranch wrote:

 Rich,

If you traded back some of your coins into FRNs to buy a tractor, make sure you pay the taxes on the sale or trade of your coins (since it is not a like-for-like exchange) and have a documented cost basis to establish your profit or loss.  When you post in a public place like this, there is a public record of it and if no taxes are paid, data miners may hold you to account.  Also, if you have dozens of transactions, you may want to have dozens of documents to show the IRS since that many transactions in PMs suggests to them that this activity may fall into the category of a business.  Just a heads up for people who do PM transactions without a record ... if you have no documentation for your cost basis, you could wind up being taxed considerably more than the taxes you should actually pay.  It has happened and it will happen again.  Be careful folks.   

I am not sure about this, but I think Rich has not revealed his name or address.  Therefore, posting a comment about selling gold bullion creates a public record of an anonymous person who said he sold gold bullion.  Of course everyone is mindful of the IRS, but I doubt this forum will create a tax liability when all he goes by is "Rich".

But the subject of taxation and bullion is a good one.  I have never sold bullion but I keep receipts.  I buy from local shops.  Receipts are handwritten or old-school cash register printouts that don't specify much.   It must be like this in most shops.  

ranch,

Your quotre is attributed mistakely to ranch rather than me but, that being said, check into such programs as Carnivore, Echelon, etc. and you'll understand that the public record isn't the threat, government surveillance is.  The IRS does data mine and can and will track you regardless of whether you post your name and address.

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