1) Be prepared to eventually be asked to file taxes on this “hobby”.
I suggest keeping detailed files on your mileage, when, where and how much coins you move, and how much silver or otherwise collectable coins you find.
For many if not most of us, it would be very easy to justify much more in expenses than we ever made from these endeavors, but this is a moot point if you cannot prove these facts.
For example, if in 2009, you found 200 ounces of silver halves, and 250 NIFC coins, and you drove 100 miles per week in pursuing this hobby, your “income” would be perhaps around 75 cents per NIFC coin, and whatever the spot price of silver was for the year. NOTE: it might be worthwhile to have a “few” receipts for silver sold at a coin dealer or perhaps on eBay to prove this. If you then deducted from this 50 cents per mile driven, as well as any other legitimate expenses, your profit from this endeavor would very quickly become a loss for tax purposes.
The fact that you collected coins other than just silver coins could work in your favor to prove that you were not some kind of “hoarder” of silver and were simply a coin collector. This would possibly be useful, as coin collecting is considered by many if not most to be a legitimate hobby while “hoarding” silver might someday be less than legal.
Owning a loupe, up to date red books, etc would mesh well with the fact that you are a coin collector and not a hoarder.
It works heavily in our favor that the IRS does not generally like for people to claim “hobby” expenses on their taxes. There are many rules for this, most if not all of which are meant to discourage people from claiming these expenses on their taxes.
Here are a few interesting articles on this…
http://www.businessknowhow.com/money/taxhobby.htm
http://www.irs.gov/newsroom/article/0,,id=172833,00.html
Basically the IRS doesn’t want to hear about hobby income or losses unless you make a profit 3 out of the past 5 years. Something to consider.
2) Expect to eventually be questioned by either a bank manager or some form of law enforcement.
What you tell the banks is your business, and for the most part, you are not required to tell them the truth, but telling less than the truth might eventually get you in some kind of trouble. In my opinion, it is best to either be very vague about it or just find a bank that accepts the truth.
You are NOT allowed to lie to law enforcement. Either tell the truth or don’t tell them anything. This is your right (currently) per the US Constitution.
In preparing for this day, it is paramount that you be prepared. If you intend to speak to them, you should have documentation to prove most, if not everything you say.
They can and probably will try to scare you, and ask you questions to try to trip you up, or make vague or not so vague threats. Be prepared for this and remember that you can terminate the interrogation at any time by invoking your 4th amendment rights.
3) What if at some point in the future, you are asked to turn in your silver?
Don’t laugh, this could easily happen and it would be played as the “patriotic” thing to do, as well as to turn in your neighbors who “might” have some silver in their possession.
The fact that you were able to provide some form of receipts for silver sold in the past would go a long way in “proving” that you sold the majority of your silver, or perhaps even all of it.
A collection of business cards from individuals who buy and sell coins at flea markets and coin shows (and pay in cash) would go a long way in “proving” that you sold all your silver long ago.
You could easily state that you sold ALL your silver to make the down payment on a house, or perhaps some other large purchase.
Also keep in mind that if you try to insure your coins against loss, you are basically advertising the fact that you have that much silver to insure.
In addition, numerous posts about large amounts of silver coins found while Coin Roll Hunting would not mesh well if you claimed to only have found 1/4th of what you reported online. Basically for this last part, we all need to curb our enthusiasm.
4) DO NOT store your silver or anything valuable in a safe deposit box. Many hundreds of these boxes were sold by the state of California several years ago, and the former owners have been forced to sue the state for Billions of dollars in losses. As more and more states face budget woes, they will certainly be viewing your safe deposit boxes as sources of income.
In addition, you might want to read up on the 1933 gold seizure. Because of this, banks were required to go through your safe deposit box, and turn in any gold item to the government, and the former owner of this gold was given paper money for it, which was almost immediately worth less….
5) Read up on the history of money laundering.
Seriously, only by having a good general idea of how this works will you be able to avoid being accused of doing it.
Avoid operating near or being associated with the gambling industry at all costs. If there is a bank in a town with a casino in it, do not go there.
Don’t make multiple deposits of coin, rolled or bagged, at different banks on the same day. Ideally make just one or two deposits per week.
Read up on the reporting requirements for large cash transactions and act accordingly. Be aware that to “structure” your deposits to avoid this can be suspicious in itself, therefore do not deposit more than the “limit” in any given week, no matter how many banks you use for dumps.
I suggest keeping detailed files on your mileage, when, where and how much coins you move, and how much silver or otherwise collectable coins you find.
For many if not most of us, it would be very easy to justify much more in expenses than we ever made from these endeavors, but this is a moot point if you cannot prove these facts.
For example, if in 2009, you found 200 ounces of silver halves, and 250 NIFC coins, and you drove 100 miles per week in pursuing this hobby, your “income” would be perhaps around 75 cents per NIFC coin, and whatever the spot price of silver was for the year. NOTE: it might be worthwhile to have a “few” receipts for silver sold at a coin dealer or perhaps on eBay to prove this. If you then deducted from this 50 cents per mile driven, as well as any other legitimate expenses, your profit from this endeavor would very quickly become a loss for tax purposes.
The fact that you collected coins other than just silver coins could work in your favor to prove that you were not some kind of “hoarder” of silver and were simply a coin collector. This would possibly be useful, as coin collecting is considered by many if not most to be a legitimate hobby while “hoarding” silver might someday be less than legal.
Owning a loupe, up to date red books, etc would mesh well with the fact that you are a coin collector and not a hoarder.
It works heavily in our favor that the IRS does not generally like for people to claim “hobby” expenses on their taxes. There are many rules for this, most if not all of which are meant to discourage people from claiming these expenses on their taxes.
Here are a few interesting articles on this…
http://www.businessknowhow.com/money/taxhobby.htm
http://www.irs.gov/newsroom/article/0,,id=172833,00.html
Basically the IRS doesn’t want to hear about hobby income or losses unless you make a profit 3 out of the past 5 years. Something to consider.
2) Expect to eventually be questioned by either a bank manager or some form of law enforcement.
What you tell the banks is your business, and for the most part, you are not required to tell them the truth, but telling less than the truth might eventually get you in some kind of trouble. In my opinion, it is best to either be very vague about it or just find a bank that accepts the truth.
You are NOT allowed to lie to law enforcement. Either tell the truth or don’t tell them anything. This is your right (currently) per the US Constitution.
In preparing for this day, it is paramount that you be prepared. If you intend to speak to them, you should have documentation to prove most, if not everything you say.
They can and probably will try to scare you, and ask you questions to try to trip you up, or make vague or not so vague threats. Be prepared for this and remember that you can terminate the interrogation at any time by invoking your 4th amendment rights.
3) What if at some point in the future, you are asked to turn in your silver?
Don’t laugh, this could easily happen and it would be played as the “patriotic” thing to do, as well as to turn in your neighbors who “might” have some silver in their possession.
The fact that you were able to provide some form of receipts for silver sold in the past would go a long way in “proving” that you sold the majority of your silver, or perhaps even all of it.
A collection of business cards from individuals who buy and sell coins at flea markets and coin shows (and pay in cash) would go a long way in “proving” that you sold all your silver long ago.
You could easily state that you sold ALL your silver to make the down payment on a house, or perhaps some other large purchase.
Also keep in mind that if you try to insure your coins against loss, you are basically advertising the fact that you have that much silver to insure.
In addition, numerous posts about large amounts of silver coins found while Coin Roll Hunting would not mesh well if you claimed to only have found 1/4th of what you reported online. Basically for this last part, we all need to curb our enthusiasm.
4) DO NOT store your silver or anything valuable in a safe deposit box. Many hundreds of these boxes were sold by the state of California several years ago, and the former owners have been forced to sue the state for Billions of dollars in losses. As more and more states face budget woes, they will certainly be viewing your safe deposit boxes as sources of income.
In addition, you might want to read up on the 1933 gold seizure. Because of this, banks were required to go through your safe deposit box, and turn in any gold item to the government, and the former owner of this gold was given paper money for it, which was almost immediately worth less….
5) Read up on the history of money laundering.
Seriously, only by having a good general idea of how this works will you be able to avoid being accused of doing it.
Avoid operating near or being associated with the gambling industry at all costs. If there is a bank in a town with a casino in it, do not go there.
Don’t make multiple deposits of coin, rolled or bagged, at different banks on the same day. Ideally make just one or two deposits per week.
Read up on the reporting requirements for large cash transactions and act accordingly. Be aware that to “structure” your deposits to avoid this can be suspicious in itself, therefore do not deposit more than the “limit” in any given week, no matter how many banks you use for dumps.
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