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Originally posted by Res Ipsa
Why was he paying people like that?
Indeed, Publication 17, in the section, Miscellaneous Deductions, does address gold coins, usually in the context of holding them as collectables and investments. For example, a rare, non-circulating gold coin would be considered a capital asset, similar to gems, jewelry, stamps, antique household furnishing, and stocks and bonds. These types of items are defined by the IRS as investment property, and investment property is considered a capital asset.
However, in the scenario of being paid for services rendered, the handyman was not holding the American Gold Eagle as an investment – the handyman was holding it as legal tender in exchange for labor.
The American Gold Eagle is legal tender just like a quarter, dime, nickel, or penny. The 1-oz Gold Eagle has a face value of $50. The ½-oz Gold Eagle has a face value of $25. Minted at West Point, NY, also available is a ¼-oz Gold Eagle with a face value of $15 and a 1/10-oz Gold Eagle with a face value of $5. The U.S. Government introduced the American Gold Eagle in 1986. The 1-oz American Gold Eagle contains exactly 1-oz of 22-karat gold.
Can the IRS have it both ways? Can the IRS claim that taxpayers must pay face value on certain legal tender and market value on others. When questioned about a more specific rule that directly addressed this type of tax question, Knierim admitted that no rule existed.
The Muckraker Report asked Knierim what the market value of a $50 bill was in today’s market. He could not say. When confronted with the fact that the cost for the materials used to produce a $50 bill amounted to approximately 6 cents, Knierim conceded the point while insisting that for tax purposes, circulating gold coins fall under a different category. The Muckraker Report asked, “A category in which there is not a specific rule or law that defines the category?” Knierim answered, “yes”.
Originally posted by WorldShadow
Star & flag for the power to common people. I so wish Ron Paul & Jesse Ventura were our next president and vice president. Show us the law for income tax, because a court of law must argue the law before enforcing it. No law, than no argument substantiating tax enforcement.