Hard Assets Alliance
by on March 2, 2021  in Investing /
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People invest in gold because, in times of inflation and extraordinary amounts of money printing, gold and silver have a tendency to rise.
But do they?

Astute investors see what precious metals are really doing… and that is maintaining purchasing power.

Gold doesn’t go up in value, the dollar drops when priced in gold.

Unfortunately, Uncle Sam doesn’t think that way...

The way the IRS sees it, the dollar is not worth less – gold went up.

And, if you want to realize that relative gain, you must pay taxes on it.

And here’s the rub: real physical gold and silver get the short end of the stick on taxes...

When you’ve held gold for a long time either in anticipation of a financial crisis or simply to preserve wealth…

All looks good until you file your taxes and find out that – unlike equities and other capital gains, which get a favorable tax treatment – gold held for more than one year is taxed as collectibles, not investments.

That means precious metals are taxed as high as 28%, much higher than long term capital gains. That’s a sizable bite out of your gains – just at the time you probably want to use that money for another investment.

Thankfully, there is a simple way, open to every American, to change that.
You just have to make one simple move...

If you invest in gold inside a retirement account you could greatly reduce, or even eliminate, your tax bill on that investment.
You are probably already aware: investments inside a qualified retirement account in the US grow tax deferred, and in some cases they can even be withdrawn tax free.

But did you realize this has a bigger impact on precious metals than on say stocks or bonds?

That’s because if you sell your gold or silver for a profit inside an IRA, you don’t get hit with that large collectible tax bill. You can control when and how you are taxed.

For example, because that cash stays in your retirement account – tax-deferred until you need to take it out – it can be reinvested in full, with no need to hold anything back for the tax man.

If you post $100,000 in gains, for example, instead of paying taxes and then reinvesting the $75k or so left over into stocks, bonds, oil, or whatever is next for you… you get to invest the full lot, compounding the speed at which your investments grow.

If you need to withdraw the money to live in retirement, there are still benefits. For example, because retirement gains are taxed as income when withdrawn, then taking your earnings out in smaller chunks over a few years can help keep your tax bracket down and minimize what you pay.

And those examples are just if you are using a “traditional” or pre-tax retirement savings account – the run of the mill IRA or funds you rolled over from an old 401(k).

If you are eligible for and savvy enough to have invested some dollars in a “Roth” account, then any of the gains you make on your gold will be tax free when you withdraw them, too. Same benefit to compounding growth and no taxes to worry about on the far end.

The point is, investing in gold through an IRA gives you options...

You get the flexibility and liquidity of a brokerage account with your choice of tax advantages for holding what many people view as the ultimate safe haven asset: physical precious metals.

And ultimately, if the value of your gold rises and you want to rebalance when other assets are relatively cheaper, you get more hedge for your dollar. Perhaps no asset is more suited to an IRA than gold.

For more postings by Hard Asset Alliance, click here

Website:  https://www.hardassetsalliance.com/?aff=TWC

WealthCare Connect may receive a referral fee from Hard Asset Alliance for purchases make through these links.

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Hard Assets Alliance
All content is for general informational purposes only and does not constitute advice. Consult with a licensed professional before making any wealthcare decisions. WealthCare Connect may receive a referral fee for transactions made through links on this website.
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