Did you know you can turn your precious-metals loss into immediate tax savings, without technically losing possession of the metals?
It’s a loophole under the “wash-sale rule” Section 1091 of the Internal Revenue Code.
The IRS defines a wash sale as:
“a sale of stock or securities at a loss within 30 days before or after you buy or acquire in a fully taxable trade, or acquire a contract or option to buy, substantially identical stock or securities.”
The rule aims to prevent investors from generating and recognizing artificial losses in situations where they do not intend to reduce their holdings in the securities that are sold.
So, if you want to claim a loss on the sale of a security (like a stock, bond, option, fund, etc.), you must wait 31 days to repurchase it or a “substantially identical” security.
However, a tax loophole exists for precious metals — bullion coins and bars — because the rule doesn’t mention “precious metals.” That means they’re not subject to a holding period for tax-swap sales.
If you’re sitting on losses on bullion coins, numismatic coins or plain old bullion bars, this tax move allows you to realize these losses without losing possession of your metals.
Source: Uncommon Wisdom Daily