Precious metals industry seeks legislative action
- Published: Nov 22, 2017, 3 AM
The Industry Council for Tangible Assets and the Precious Metals Association of North America are both urging members of Congress to retain like-kind exchanges for personal property in Section 1031 of the U.S. tax code, and say that eliminating such changes will adversely affect dealers and investors in precious metals.
Both organizations argue that separate tax bills in both the House and Senate, if enacted, would restrict like-kind exemptions to real estate only, and eliminate personal property.
“We do not know how extensive the use of like-kind exchanges is among coin dealers and their clients, so we cannot provide an assessment [on specific affects of the tax legislation],” according to David Crenshaw, ICTA's chief operating officer. “However, both the House and Senate bills would limit the exemption to real estate exchanges, only. The viability of all other like-kind exchanges, not only coins, would be threatened.”
Mitchell Moonier, speaking on behalf of the Precious Metals Association of North America (formerly Silver Users Association), said, citing Title 26 US Code, §1031, “currently, U.S law allows for the deferral of capital gains on ‘the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment.’
“For the precious metals industry, this impacts both investors and jobs along the precious metals supply-chain. For example, an investor may hold gold bullion at a depository or refiner and subsequently decide that they want to take physical possession of their investment. To accomplish this, they exchange their gold bullion holdings for a 'like-kind' product such as American gold Eagle bullion coins.
“Similar exchanges happen every day and they help sustain jobs along the precious metals supply chain.
“LKEs allow investors to make responsible decisions with their continuing investments without facing unfair taxation. Once an investor ‘cashes-out’ on an investment, then the gain is realized.
“The House and Senate tax reform bills include changes to Section 1031 that would repeal LKEs for personal property, such as investments in precious metals,” Moonier said.
MORE RELATED ARTICLES
Paper Money Feb 15, 2024, 5 PM
US Coins Feb 15, 2024, 1 PM
World Coins Feb 14, 2024, 5 PM
US Coins Feb 14, 2024, 1 PM