This Tax Secret Could Save You Big

By Brian Zweig

It’s the end of the year, and we all have one very important—albeit menial—thing on our minds: taxes. In light of the recent Senate and House Republican tax bills, many Americans have been paying close attention to how this new bill will affect their taxes in 2018 and beyond.

In case you didn’t read our article from last Monday, the new Senate and House Republican tax bills seek to change the current tax brackets, abolish or cut back on several popular deductions, and increase the child tax credit, among others.

Regardless of how these new tax bills will affect you, there’s one little-known strategy you can use to get some cash back this tax season…

The Precious Metals Tax Swap

Because precious metals are technically considered commodities, they aren’t subject to the 30-day “wash rule” established by IRS Code Section 1091. Unlike securities, which are subject to the “wash rule” prohibiting the repurchase of the same security within 30 days, precious metals present a unique opportunity to turn your losses into gains. With a precious metals tax swap, you can capture a loss by selling your metals to ASI and then immediately buying them back. This process is incredibly simple and provides many benefits:

• You can capture the loss for tax purposes.
• You can offset capital gains one for one.
• If you do not have capital gains to offset, you are permitted to claim $3,000 of your total loss each year until you use it all up—for up to 5 years.
• You can minimize your exposure to market fluctuations by dispensing with the 30-day holding period typical with equities.
• In most cases, you can get back the exact same merchandise you sold at the new cost basis.

The main advantage to a precious metals tax swap is that you can sell and buy back your metals as quickly as the same day—you don’t have to waste any time waiting! Just ship your metals to ASI, and we’ll get you started*.

Should I Consider a Tax Swap?

Before you decide to initiate a tax swap, we advise talking with your tax attorney, CPA, or advisor to determine if a tax swap is beneficial for you. Here’s one simple method you can use to help you decide whether a tax swap is the right move for you financially…

If the tax loss you are able to capture is 10 times or more than the cost of capturing the loss, this is a no-brainer. If the tax loss you are able to capture is less than 10 times the cost of capturing the loss, you may still very well benefit, but you should work through all the numbers with your advisor to be sure before moving ahead.

How Does It Work?

It can be frustrating to watch your investments depreciate; however, with this simple process, you can keep your metals and capture your loss! Our knowledgeable Preferred Client Relations representatives will walk you through the entire process, so you can start turning your losses in to gains*:

1. Send ASI your precious metals, numismatic coins, or Perth Mint Certificates, regardless of where you purchased them. 
2. Sell your metals to ASI, and then immediately buy them back at a 2% spread for bullion, a 3.5% spread for Perth Mint Certificates, and a 4% spread for numismatic coins.
3. We’ll send your same metals or replacement Certificates back to you.
4. Capture your loss on your future tax returns.

Note: Due to IRS requirements, you are required to physically ship your bullion coins and bars, Perth Mint Certificates, or your numismatic coins to us, and we have to physically ship them back to you in order to complete the tax swap.

As Easy As 1-2-3 (4-5)

Over the last 35 years, ASI has helped hundreds of investors capture losses via tax swaps—which means you can trust us to help you make the most of your losses. Here’s just one example of how the process can look:

1. You purchased (79) 1-ounce silver rounds at $43.30 per coin and (74) 1-ounce silver American Eagles at $45.80 per coin in May 2011, and you want to complete a tax swap while the spot price of silver is down.
2. You sell your 1-ounce silver rounds and 1-ounce silver American Eagles to ASI in November 2017 at $16.87 per coin and $18.27 per coin, respectively.
3. You then buy back your silver rounds and silver American Eagles at a 2% spread for $17.21 per coin and $18.64 per coin, respectively.
4. Your total out-of-pocket expenses for this swap would be $54.24 plus shipping.
5. Your captured tax loss would be $4,125.19 total.

Now when it comes time for you to file your taxes, you can report a loss of $4,125.19 on your tax returns to offset any profits*. Your actual captured tax loss will vary depending on the current spot price and the amount of metals you would like to swap.

If you’ve seen the value of your precious metals, numismatic coins, or Perth Mint Certificates decline since you purchased them, a precious metals tax swap could be a great opportunity for you to claim a loss on your taxes. To see how a tax swap can work in your favor, please call us at 800-831-0007 or email us.

*Asset Strategies International has sought legal advice on this subject; however, as with any matter regarding taxes, you should first consult your CPA or tax attorney. Prices quoted in this article are provided as an example before making any decisions. Please speak with an ASI representative to receive your custom pricing.