cash or check?

Shelby-villian

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My local coin shop in California said if I wanted to purchase over $10K worth of coins in cash, it will be reported. By personal check, it is OK.

Should I pay by cash or check? Does it make a difference besides the wait time for the check to clear?
 

DoChenRollingBearing

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I welcomed you elsewhere, Shelby, so I will just skip to the heart of your question.

If you pay by check, you leave a paper trail. Which is OK if you don't care.

If you pay $5000 in cash at two coin shops you MIGHT be able to get away with not having to show ID or have them write up an Invoice or Receipt. I bought a hair over $10k in gold (my biggest purchase ever) not real long ago, in cash (at a coin shop), they did not ask to see anything. No receipt, nada! No paper trail. But, no receipt showing that I had bought at $1650, NOT including premium, either (I have been buying small quantities of gold for decades).

Different coin shops may have different policies even within the same state. I buy from two shops in my general area. Sometimes they want to see ID or write an receipt, sometimes no.

If you ever SELL, then yes, they will report that to the IRS if over $3000 (I believe, someone confirm please?!). I will never sell mine (God willing), I will GIVE it away...

Good luck!
 
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pmbug

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... no government regulations require the reporting of the purchases of any precious metals, per se. If payment is made by cash greater than $10,000, however, it becomes a "cash reporting transaction." It is not the gold that the government wants reported but the cash. Such reporting applies to all business transactions involving more than $10,000 cash.

Regarding cash transactions, Official General Instructions for IRS Form 8300 read: "Who Must File. - Each person engaged in a trade or business who, during that trade or business, receives more than $10,000 in cash in one transaction or two or more related transactions must file Form 8300. Any transactions conducted between a payer (or its agent) and the recipient in a 24-hour period are related transactions.

This regulation applies to cash - greenbacks, paper money. It does not apply to personal checks, wire transfers, or money market withdrawals. When cashier's checks or money orders are involved, cash reporting may be triggered.

Form 8300's General Instructions define as cash "a cashier's check, bank draft, traveler's check, or money order having a face amount of not more than $10,000." Using a cashier's check less than $10,000 would be a "cash transaction," but it would not be reportable because it is less than $10,000. However, two cashier's checks, each less than $10,000 but totaling more than $10,000 for a single purchase, would be considered cash and subject to reporting.

Further clarification: If an investor makes a $15,000 investment in gold and pays with a single $15,000 cashier's check, it is not reportable. If, however, he pays with two or more cashier's checks each less than $10,000, the dealer would be obligated to report.

Cash reporting requirements were not written specifically for the precious metals industry but for all businesses. The purchase of a car, boat, or jewelry, and payment with two cashier's checks, each less than $10,000 but totaling more than $10,000, would be a reportable transaction.

Another example: an investor agrees to buy precious metals totaling more than $10,000, again say $15,000, and wants to make payments with money from two accounts. If the investor withdraws $8,000 from the first account and gets a cashier's check, and then gets another cashier's check for $7,000 from the second account, the transaction becomes reportable. A purchase of $30,000 and payment with two $15,000 cashier's checks would not be a reportable transaction. The significant amount is $10,000.

Personal checks or checks drawn on the payer's own account are not considered cash. Form 8300's General Instructions read: "Cash does not included a check drawn on the payer's own account, such as a personal check, regardless of the amount."
...
http://www.certifiedmint.com/myths_lies.htm

...
Q: Are bullion transactions of $10,000 or more reported to the government?

A: Only if they involve cash or cash instruments such as cashier's checks which total over $10,000. No report on transactions involving single checks or bank wires is required. Currency regulations involving amounts over $10,000 were designed to thwart money launderers and drug dealers.
...
http://www.gold101.com/faqs/#transactions

~~~

Whether cash or check is better depends upon your comfort level with a government report being filed versus a record in your checking history.
 

DoChenRollingBearing

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Then I lucked out or something. Because I paid with a stack of $100s, no ID, no receipt. Maybe I should not have mentioned this...

Yes, do be careful re "structuring" purchases (buying over $10,000 in two smaller purchases) so that you do not fall into that little trap. Notice I wrote "be careful".
 
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Shelby-villian

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" Any transactions conducted between a payer (or its agent) and the recipient in a 24-hour period are related transactions. "

So does that mean I can buy PMs in cash every day for $10,000 and not leave a paper trail?
 

pmbug

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Less than $10,000 and every other day is the letter of the law as I understand it. Bear in mind that your local coin shop might decide to file reports that aren't required, so it's always a good idea to get to know them and establish a business relationship before asking questions that raise red flags. $.02
 

Shelby-villian

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Good info. I'll ask my guy if that is what he goes by.

I think it's common sense that anyone buying precious metals would not want anyone knowing what he is doing... Why do I feel like a criminal now? :)
 

DoChenRollingBearing

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@ Shelby

You can always go to different coin shops as well (if handy). You could buy $2000 - $5000 each time, every other day (or twice a week, etc.) as PMBug said. It would not take you long to get a nice big stash doing that. Let's do the math:

$1760 (about what an Eagle would cost now) * 2 (shops) * 2 (twice a week) * 4 (one month) = $28,160 in a month.
 

white&yellow999

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Went to post a reply and what I would say has basically been said above. Having more then one coin shop in your area is a huge advantage. I'm lucky enough to have 3 good ones w/in 50 miles. I try to pay in cash as much as possible though obviously not possible if ordering online.
 

ancona

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Another way would be to pre-pay one of those Am Ex gift cards or a Visa pre-pay card. There is no name attached to it. it is simply a number, and they can be had very cheap.
 

DCFusor

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There are classified parts of the Patriot act my banker slipped up and told me about.
(You gotta love being a big fish in a tiny pond, small bank and town)
I'll say no more, but a lot more is getting reported than people think, and the vendors are enjoined not to tell about it under penalty of this law.
Pretty sick. They can't report what they don't know however. But their security camera can.
 

pmbug

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... a lot more is getting reported than people think, and the vendors are enjoined not to tell about it under penalty of this law. ...
That's the vibe I get from my local coin shop. They seem to hint about a lot of things without saying anything expressly.
 

Shelby-villian

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Thanks for replies. I think buying about $5K in cash in different shops is the best course of action for now.

With the Patriot act, TSA running the airports, and SOPA bill in the works, its clear we are heading towards a fascist state and need to take the necessary precautions to protect yourself and your family.
 

FCHorn

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Less than $10,000 and every other day is the letter of the law as I understand it. Bear in mind that your local coin shop might decide to file reports that aren't required, so it's always a good idea to get to know them and establish a business relationship before asking questions that raise red flags. $.02
Definitely this...
 
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