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Fair Treatment for Precious Metals Investors Act
by coinlegislation.com

S.1367: Fair Treatment for Precious Metals Investors Act
Summary: Seeks to amend the Internal Revenue Code of 1986 to treat gold, silver, platinum, and palladium investments in the same manner as stock and mutual fund investments for the purposes of the capital gains tax rates imposed.
Sponsor: Sen. Michael Crapo
Date Introduced: June 25, 2009
Current Status: Referred to Committee (June 25, 2009)
The bill seeks to amend the Internal Revenue Code in order to attain fair treatment for precious metals investors as compared to stock and mutual fund investors. Under the current tax law, investments in precious metals are treated as “collectibles gains” which are subject to a tax rate of 28%. By contrast, investments in stocks and mutual funds are currently subject to a tax rate of 15% if the assets are held for more than one year.
The bill would amend Section 1(h)(5) of the Internal Revenue Code of 1986 by striking ‘(as defined in section 408(m) without regard to paragraph (3) thereof)’ and adding a new paragraph:
‘(C) COLLECTIBLE- For purposes of this paragraph, the term ‘collectible’ has the meaning given such term by section 408(m), except that in applying paragraph (3)(B) thereof the determination of whether any bullion is excluded from treatment as a collectible shall be made without regard to the person who is in physical possession of the bullion.’
Section 408(m) defines “collectibles” for the purposes of treatment within individual retirement accounts. Paragraph 3 had specifically created an exception for certain coins and bullion for the purposes of the subsection. Section 1(h)(5) defines the maximum capital gains tax rates for collectibles gains. This section references 408(m) to define collectibles, but specifically disregards Paragraph 3, thereby enveloping precious metals within the definition of collectibles.
The amendment stipulated by the bill would define collectibles under Section 408(m) including the exception for certain coins and bullion. This would result in the exclusion of some gold, silver, platinum, or palladium coins and bullion from the classification as collectibles.
If the bill becomes law, the following coins and bullion would be excluded from classification as collectibles:
Gold coins described in paragraph (7), (8), (9), or (10) of section 5112(a) of title 31, United States Code. (American Gold Eagles)
Silver coins described in section 5112(e) of title 31, United States Code. (American Silver Eagles)
Platinum coins described in section 5112(k) of title 31, United States Code. (American Platinum Eagles)
Coin issued under the laws of any State.
Any gold, silver, platinum, or palladium bullion of a fineness equal to or exceeding the minimum fineness that a contract market (as described in section 7 of the Commodity Exchange Act, 7 U.S.C. 7) requires for metals which may be delivered in satisfaction of a regulated futures contract. (Other bullion coins or bars meeting the requirement for minimum fineness)
In order to become law, the bill must be passed in the House and Senate, and then signed by the President. The bill currently has three cosponsors and has been referred to committee. A similar bill had been introduced in 2007, but was never voted on in the House or Senate.

 



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