Frequently Asked Questions

Most individuals know the spot price as the number used to track the value of raw precious metals on any given day. However, these prices that you may often see quoted on TV or the Internet are different than the actual selling price of precious metal coins and bars. In detail, the extra cost of any coin or bar over the spot price is the result of a number of factors, including 1) manufacturing, distribution, and administration costs incurred by the mint or refinery that produced the coin or bar, and 2) any markups,representing the cost of sale and the profit for the wholesaler selling the coin or bar to the retailer. The retail dealer or gold broker (such as American Bullion), in turn, will mark up the wholesale price to cover its costs and realize a profit when pricing the coin or bar for the purchaser/investor market. This series of incremental price increases applied to coins and bars as they pass through the distribution chain is a typical market mechanism present in virtually every other industry in existence, from auto parts to zippers.

Physical precious metals are considered long-term investments. The recommended time frame for holding them is 5 to 10 years or longer. Planning for the long-term is a better way to understand what precious metals can do for your portfolio and your financial future. Precious metal values go up or down depending on many factors, included but not limited to the conditions of the U.S. and world economies, geopolitical crises, and the principle of supply and demand.

Most precious metal investors are not coin collectors. There are some individuals that find interest in coin collecting as a way to diversify their assets while furthering their hobby. If you are interested in beginning a precious metals coin collection, our precious metals specialists can assist you with any questions.

IRS Form 1099-B, as applied to precious metals

When a client sells bullion to a precious metals broker, a Form 1099-B may be required depending on the type, fineness, and quantity of the bullion sold. If the bullion sold meets the requirements for reporting, the broker must complete and send to the IRS a 1099-B form detailing the transaction.

Broker Reportable Items List

Previous regulations required brokers to report transactions consisting of as little as one silver dime. However in 1992, The Industry Council for Tangible Assets (ICTA), a nonprofit association dedicated to the rare coin, currency, and precious metals industry, successfully completed negotiations with the IRS that “established reasonable reporting requirements on certain bullion-related products.” The result of these negotiations, as understood by ICTA, requires the sale of the following items in excess of the quantities listed below to be reported to the IRS via Form 1099-B:

*For bars, any hallmark regardless of whether that hallmark is accepted as “good delivery” on any of the commodity exchanges.

SOURCE: ICTA

Important for you to know

If what you are selling does not fit the list above, the broker is not required to report the transaction. Please consult your tax advisor to find out your reporting responsibilities on other precious metal, bullion, or numismatic transactions. The information here is provided to educate and assist you and is not intended to give you tax advice in any shape or form.

While a stricter interpretation of the regulations is possible, ICTA believes the above guidelines to be those which fulfill the spirit of ICTA’s negotiations with the IRS. Though the information provided herein is based on ICTA’s discussions with the Internal Revenue Service, others may differ with ICTA’s interpretations of these regulations. ICTA strongly cautions that alternative interpretations may not fulfill the requirements.

American Bullion Risk Disclosure: Purchasing precious metals in the form of bullion, bars, coins, proof coins, or numismatic coins involves a degree of risk and variable premiums that should be carefully evaluated prior to investing any funds. American Bullion and its agents are not registered or licensed by any government agencies and are not financial advisors or tax advisors. Past performance is not a guarantee of future results. Gold and other precious metals are considered long-term investments meant to be held for 5 to 10 years or more. This publication is meant as a resource and not intended to offer any financial or tax advice.

Yes. You can participate in precious metals investing by adding gold or silver to an IRA. The most common method for precious metals investing is holding metals in a self-directed IRA. Employer-sponsored plans such as a 401(k) can only hold certain types of investments. Gold and silver are generally not permitted.

American Bullion works exclusively with STRATA Trust Company  (STRATA) to act as the custodian for our clients. STRATA offers three different self-directed IRA plans, each with its own fees and account restrictions:

Precious Metals IRA. May only hold precious metals. $25 set-up fee. $160 annual account fee.*

Basic IRA. May hold any combination of precious metals, brokerage accounts, public REITs, public LPs and LLCs, Public Note of Debt Offerings, bank CDs, or other publicly registered or available products. No set-up fee. $200 annual account fee.*

Flex IRA. May hold any combination of precious metals, real estate, trust deeds, mortgages, private stocks, REITs, private LPs or LLCs, Private Note of Debt Offerings, or other alternative investments permitted by SDIRA Services. No set-up fee. $275 annual account fee.*

*Annual account fees may vary if the amount invested is above $100,000 or if the metals are stored in a segregated storage facility.

A direct rollover is a tax-free transfer of funds from one retirement plan to another. Distributions from a qualified retirement plan may be transferred to another retirement plan or an individual retirement account (IRA), while funds from an IRA may be rolled over to another IRA. During the rollover process, your current custodian will carry out its process for liquidating your investments. Once that is done, the resulting funds will be sent to your self-directed IRA where they can then be used to purchase precious metals.

You can withdraw money from your IRA whenever you want, but if you are under age 59 ½ you will pay a 10% penalty on the amount you withdraw in addition to the regular income tax you’ll owe on the withdrawal. This is the government’s way of discouraging you from cashing out before you retire. If you are over 59 ½, you can make penalty-free withdrawals (known as “qualified distributions”) from any IRA. You will still owe income tax on the amount withdrawn, unless it’s from a Roth IRA and it has been at least five years since you first began contributing to it. American Bullion and its agents are not tax professionals. If you have any questions concerning the tax implications of owning an IRA, consult a tax professional.

Yes. IRA rollovers are tax-free when the money is transferred from an employer-sponsored pension or other qualified plan to an individual retirement account (IRA) and is deposited within 60 days, or by instructing a financial company such as American Bullion to transfer it to a second institution on your behalf. As long as the new deposit is made within 60 days, there is no tax liability.

The main difference between a Traditional and Roth IRA is the way contributions are deducted for tax breaks. With a Traditional IRA, you pay the taxes when you withdraw the money in retirement. With a Roth IRA, you pay the taxes on the front end, but there are no taxes on the back end.

Your money grows tax-free while in either a Traditional or Roth IRA account. Anyone with earned income can contribute to a Traditional IRA, however there are income limits for contributing to a Roth IRA. Whereas contributions to Traditional IRAs are either deductible or non-deductible, Roth IRA contributions are always non-deductible. As a result, Roth IRAs offer tax-sheltered growth, whereas Traditional IRAs offer tax-deferred growth. Roth IRAs are more flexible if you need to withdraw some of the money early. With a Roth IRA, you can leave the money in for as long as you want, letting it grow and grow as you get older and older. With a Traditional IRA, you must start withdrawing the money by the time you reach age 70½. American Bullion and its agents are not tax professionals. If you have any questions concerning the tax implications of owning an IRA, consult a tax professional.

Metals purchased for a retirement account must be sent directly to the depository in order to avoid IRS tax penalties. After reaching the IRS-defined retirement age, individuals can request a distribution in the form of their precious metals and begin taking physical possession at that point.

To inquire about or make a purchase of precious metals, please call American Bullion at 1-800-326-9598 and our precious metal specialists will assist you.

Yes. A valid Social Security number is required when a new self-directed IRA is opened. A Social Security number may or may not be required when you make a cash purchase, depending on the type of transaction. A precious metals specialist at American Bullion will be able to answer any of these questions, just call 1-800-326-9598.

American Bullion does not deal in paper-backed assets. All of our clients are purchasing physical gold, silver, platinum, and/or palladium.

Wire funds are easy to set up and are usually completed on the same day. To receive the necessary information for American Bullion’s wire transfer account, please contact our precious metals specialists at 1-800-326-9598.

Yes. American Bullion recommends a minimum rollover amount of $10,000 to account for any fees associated with the process.

Orders for precious metals placed with American Bullion are shipped via express mail with the US Postal Service or FedEx.

You can receive more information about American Bullion by calling 1-800-326-9598 or by visiting the American Bullion contact page.