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THE USA PATRIOT ACT STRIKES HOME |
Section 352, of the USA PATRIOT ACT, now states a provision that requires all "financial institutions" to establish Anti-Money Laundering Programs. Although a dealer "in precious metals, stones or jewels", is a  "financial institution" under the Bank Secrecy Act, FinCEN had not previously defined the term or issued regulations regarding such dealers. Now, we note the final regulations for the Patriot Act’s unmistakable reporting requirements are published. It seems bullion buyers are square in their sights. For years, we advised against the acquisition of bullion related items. In addition to poor performance, they are bulky, and now more cumbersome than ever with the new regulations. We have long advocated buying rare coins. How can we define a rare coin? Precisely, anything you can’t buy two of. The logic is simple. In addition to a more reliable track record, rare coins have now merited a regulatory advantage as well. Essentially, Section 352 regulations deem the proceeds of any coin transaction, not involving a premium exceeding 50% of its intrinsic value, a reportable event. So all of you bullion heads who purchased British Sovereigns, Swiss Angels or French Roosters expecting to avoid the tax man, now face a reportable event on their sale. So drag out those records, and be sure that you can prove your cost, because when you go to sell, a Social Security or Tax Identification number will be required. Questions? Call us. |
