Excerpts from “Selected Tax Issues to Consider When Investors Move or Exchange Precious Metals Holdings

By Carolyn A. Betts and Catherine Austin Fitts

In this Report, we identify and summarize certain IRS revenue rulings and other guidance that may apply to precious metals exchanges and the determination whether and under what circumstances the conversion of precious metals holdings from one form to another may result in a non-taxable exchange under section 1031 of the Internal Revenue Code (“Code”). We also provide links to articles that provide more generalized explanations of basis, identification requirements and timing issues, the use of “qualified intermediaries,” the concept of “boot” (where part of the exchange is in the form of cash, because the items being exchanged are not of exactly equal value), and taxation of precious metals in general.

This report deals only with U.S. federal law and is not intended as a substitute for an analysis by an expert legal or tax advisor relative to a particular situation, but rather is intended to assist investors and practitioners in identifying some of the relevant issues and questions to be considered before entering into an exchange.

This report is now publicly available in pdf and web format.