6 replies to this topic

[BobG]

Occasionally we watch Gold Rush and it's spinoffs. We use the dvr aggressively to wade through the bs and drama. 
My question is, at what point in the process does the miner have to account for the weight of the gold and it's value as it relates to income and taxes? Is it when it's found? When it's processed? When it's weighed for the cameras? When it's cashed in at a bank or refinery?
I have no idea. Anyone know?
Cheers

[badogg]

I would suspect when they exchange it for actual currency.

[AspenLeif]

I would suspect when they exchange it for actual currency.

Yep, it's like selling a manufactured item.  As soon as it monetized (you sell it), now you pay taxes on it.  

[SnowMan]

I would suspect when they exchange it for actual currency.

 

 

This. 

 

I know someone with a very small time hobby mine out west.  He basically never sells any and thus never pays taxes.  His plan that if he ever needs the cash he'll sell it a bit at a time into the collector / secondary market.  Which is pretty active from what he says.  I haven't talked gold with him in a few years, but last I knew he was finding "a few ounces" a year and had been at it for a decade. 

 

I'm sure it's different for the big boys who are digging out hundreds of ounces a year. 

[BobG]

I wondered if the value totals that they show for a cleanout on the program are then used as income at that moment.

[toonces]

What I was taught when I got my MBA...  Assets and Liabilities are posted when you believe they are realized.  There may be a IRS requirement for how often withholding is paid as a function of sales.  But, I don't pay taxes, income or property, on my inventory.  There may be different rules for certain items, like vehicles.

[badogg]

Interesting information about this in the below IRS publication.

 

placer.pdf (irs.gov)