Tax loophole on Gold Eagles

[Rajiv]

Re: Tax loophole on Gold Eagles

Only if the business is profitable -- also the company would not be paying social security taxes on the amount -- which is 15.3%. So along with that reduced burden, and the lower amount you would pay your employee, that may well be a wash for the employer

Of course you would want to make sure that the emplyee has met the total life time social security deductions -- so that he would be eligible for SS

But of course the employer could be a loss making entity -- in which case -- a total reduction in expenses.

[rdgmail]

Re: Tax loophole on Gold Eagles

Based on the email exchange with the IRS, seems to me you could also dispose of your gold eagles by paying them to others for services. Your employer pays you a couple of $50 gold eagles for some work. Later in the week, you pay your construction contractor, nanny, auto repair tech or whomever "$50" for their services. Your original cost basis was $50 for wages and your "selling" price was also $50. You validly report your gain or loss at $0 to the IRS. Obviously, this isn't what the IRS intends for you to do, but isn't the logic consistent with the IRS email response? If so, barter by gold eagles may be a valid way of actually avoiding paying taxes on income gains from gold eagles.

Disclaimer: This isn't advice - I don't know what I'm talking about.

[Rajiv]

Re: Tax loophole on Gold Eagles

Unfortunately, whoever converts the "$50" to FED notes, would have to pay taxes!

[grizam303]

Re: Tax loophole on Gold Eagles

Unfortunately, whoever converts the "$50" to FED notes, would have to pay taxes!

Maybe the mints should just start running overtime on smaller gold denominations. 1/20oz should fill my gas tank. Wouldn't that make the whole hyperinflation thing a little more convenient? I'd be down.

[c1ue]

Re: Tax loophole on Gold Eagles

Only if the business is profitable -- also the company would not be paying social security taxes on the amount -- which is 15.3%. So along with that reduced burden, and the lower amount you would pay your employee, that may well be a wash for the employer

From an employee's perspective maybe this makes sense, but from a business owner's perspective, even a non-profitable business can carry forward losses.

Throwing away the ability to write off the employee's salary and overhead is not something any real business owner would do, because even a carried tax loss is something worth money should, for example, the business be sold.

Sure, there is some positives - avoiding some amount of employer match FICA, but still you're talking about losing 87% of the salary writeoff vs. gaining 6.2% of not paying employer match FICA. Plus the employer match FICA is also a writeoff.

I don't see how this is a good thing for the employer.

[blazespinnaker]

Re: Tax loophole on Gold Eagles

From an employee's perspective maybe this makes sense, but from a business owner's perspective, even a non-profitable business can carry forward losses.

Throwing away the ability to write off the employee's salary and overhead is not something any real business owner would do, because even a carried tax loss is something worth money should, for example, the business be sold.

Sure, there is some positives - avoiding some amount of employer match FICA, but still you're talking about losing 87% of the salary writeoff vs. gaining 6.2% of not paying employer match FICA. Plus the employer match FICA is also a writeoff.

I don't see how this is a good thing for the employer.

I don't see how a business would use this to pay their employers.

However, if it all pans out, people who are purchasing services (nannies, house cleaning, house construction, etc etc) could use this system and could probably get a discount if they are paying in gold coins.

As someone else said, there is an interesting approach here to pay black market transactions. Accepting payment for certain goods in hard currency has a lot of benefits, especially when it comes to laundering the money.

[sn1p3r]

Re: Tax loophole on Gold Eagles

I knew this sounded familiar

http://onemansthoughts.wordpress.com...netary-system/