Asset Protection BLOG - Mark Nestmann: Gold Eagles Don't Have Tax Advantages, but You May Want to Buy Them as a Hedge Against Confiscation

Recently, a reader contacted me in relation to a recommendation I made in my book Austrian Money Secrets to purchase U.S. gold eagles, rather than other gold bullion coins.

I stated there that for U.S. persons, unlike other forms of gold, eagles are eligible for the reduced 15% tax rate on capital gains. That's only true, however, if you're in the 15% tax bracket (e.g., married filing jointly with an adjusted gross income under US$63,700).

Gold eagles along with all other forms of gold bullion are considered "collectibles." If you've held them for over one year, your gains are taxed at your marginal tax bracket. For collectibles, the maximum rate is 28%, not 35%.

However, if you're concerned about government confiscation of gold, you might wish to purchase gold eagles, rather than some other form of gold. The 1985 legislation that authorized production of the coins now known as gold and silver Eagles stipulates that these coins are to be considered "numismatic items."

They're not specifically exempted from any future government confiscation of gold. However, the terms of the emergency order President Franklin D. Roosevelt issued in 1933 that forced owners of privately owned gold to sell their holdings to the government specifically exempted "gold coins having recognized special value to collectors of rare and unusual coins."

I don't think another gold confiscation is particularly likely, mainly because the takings would be pretty slim. If the federal government gets desperate enough to begin confiscating property under some emergency decree, it would likely start with assets that are easy to identify and with a much greater value--real estate, stocks, pension funds, etc. However, should you believe that numismatic coins would
be exempt from a future gold confiscation, then you should consider you should consider purchasing the only coins specifically defined in U.S. law as "numismatic."

Finally, there's one additional benefit to buying gold and silver eagles. Unlike other forms of gold or silver bullion, you can purchase them through your Individual Retirement Account. Gains are tax deferred until you withdraw money from the IRA.