Buying gold is a transaction that can help someone gain a certain amount of financial security, Unfortunately, there are dealers who perpetuate myths in an attempt to persuade people to make purchases. While buying gold is a practice that is considered quite favorable, you do not want to begin the process because you have been duped by a dishonest seller.
Here are two of the myths that surround gold transactions and the truth behind these falsehoods:
The Guise Of Non-Reportable Gold
There are some dealers who offer a grade of gold that is said to be non-reportable. Since buying large amounts of gold and having a huge tax liability doesn't sound very pleasant, many consumers pay a premium for this gold that is alleged to have no reporting requirement.
The problem with this is the fact that the reporting of gold purchases is not necessary unless the the total of the transaction is at least $10,000. Only then would a taxpayer be required to report, and any dealer leading you to believe otherwise is doing so in an attempt to make you spend more money.
Understanding Numismatic Coins And Confiscation
One thing that many buyers are afraid of when buying gold coins is government confiscation. In April of 1933, President Franklin D. Roosevelt signed an order that prevented the hoarding of gold.
Since he felt that owning too much of the precious metal made the Depression even worse, he criminalized the owning of excessive amounts of gold and made it legal for the government to seize it from those who did not follow the order. There was a clause in the Act that protected rare coins, but that was never clarified at the time.
Later on, the government finally classified rare gold as that produced prior to April 5, 1933. This means that any gold created before that date is not likely to be confiscated in the event that the government has to make seizures.
Unfortunately, many consumers are not aware of the changes and they are persuaded to buy numismatic coins in a bid to protect themselves. While these coins have a higher face value and are historical in nature, they are classified the same way as any other coin, which means buying them will not offer any added protection against confiscation.
Before going out and making a gold purchase, it is important for you to understand the truth behind popular myths. This will protect you from becoming the victim of a dealer who uses ignorance of the law to bilk people out of their money. To learn more, contact a company like Wimpey's Pawn Shop.