I was just joking about the tax man but I guess I opened a nice can of worms. Having never sold any precious metals myself, and being a fairly honest guy, I've been thinking recently about what I would do if I sold some silver. I pay my taxes as required and don't mind doing it. But there is a part of all of us that naturally wonders about the implications of selling some silver on the side and not reporting it. Make no doubt about it, if you don't report it and the IRS finds out you are in serious doo doo. But that doesn't seem to stop some people from taking the chance anyway. So I'm not here to judge anyone who doesn't report it. That's their perogative.
That short rant brings me to an interesting point. JP got a really good price at 2.23 per half. He may have even shopped around quite a bit before pulling the trigger. However, if he was inclined to NOT pay taxes then that 2.23 is actually not a good deal at all. Assuming that he will pay around 25% tax on the difference between his selling price and purchase price, that turns out to be about 43 cents per half ((2.23-0.50)*0.25=0.43). This brings his actual selling price down to $1.80 each which isn't nearly as good. Given that he paid only 50 cents for the half (plus a whole lot of time) he may still consider this to be a reasonable profit. But it goes to show that anyone looking to do this under the table might be better served by finding a private individual for a cash transaction of much less than 2.23. In fact, getting an anonymous, cash price of anything over $1.80 results in a higher profit (at the expense of not being able to sleep as easy at night).
So I'm not advocating not reporting this on your taxes. But for those of you who are inclined to try and do this under the table it seems reasonable to consider that a private buyer offering less can actually be better than a dealer offering more who will force you to report it on your taxes.
I'd probably report it either way so what JP did would be my course of action as well.
