Whether the investor is converting from physical possession to allocated storage or overseas storage, from coins to bars to exchange traded funds, or from gold to silver, buying and selling precious metals is ideally suited for exchanges and wealth preservation since the new regulations were issued in 1991. Investors who own gold and silver can take advantage of the price differentials and rate of appreciation in gold and silver. This gives precious metal owners a tremendous advantage over other investment asset classes.
Like kind exchanges reduce, defer, and/ or eliminate taxes and the related financial costs, such as debt, interest and taxes on debt replacement on the purchase and sale of investment and business property.
Like kind exchanges are easy to transact. Business owners and investors can exchange virtually any type of business or investment asset whenever they want, regardless of how it is owned, how long it is owner and whether or not it is leveraged with debt. Assets that cannot be exchanged tax-free are stocks, bonds, REITS and limited partnership interests.
Investors can increase their wealth tax-free using like kind exchanges! Investors who have owned gold for the last six months have enjoyed a 14.77% increase into May. However, if that same gold investor had converted their gold bullion for silver bullion, they would have enjoyed an 85.56% increase in wealth over the period and paid no taxes on conversion. Current taxes on gold and silver held for more than a year are 28%, plus state taxes. Taxes for assets held for 12 months or less are 35%, plus state taxes.
There are significant advantages to exchage over self-directed IRAs. Direct exchanges have several advantages over self-directed IRAs because there are:
* no limitations of the type of gold and silver you may purchase
* no limitations on the amount you earn
* no annual fees
* no storage or custody fees
* you may possess the gold and silver directly
* distribution or transfer of gold or silver either as a gift or business transfer may not be reportable to the government
* losses may offset regular income
Strategic Property Exchange offers the full service. Like kind exchanges must be handled by a qualified and experienced exchange company, acting as a third party, and not by a dealer or by the investor. The funds must be held in a qualified escrow account. At Strategic Property Exchange, we manage the exchange quickly and efficiently to minimize any market risk by not being continuously invested, provide all necessary documentation and official tax forms to attach to your tax return, and a tax opinion that protects your exchange from a potential IRS challenge.
Stephen Robison is president of Strategic Property Exchange, LLC, Cincinnati, Ohio.