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Reporting Requirements : Buying
What we are required to tell the government
When you buy from us
The reporting requirements have evolved from Anti-Money Laundering laws over the last few decades. Basically, it helps the government find and prosecute individuals or organizations that are committing crimes and/or trying to make dirty money clean.
What is reportable?
If it is a cash transaction (defined below) that is:
-
Over $10,000
- Received in one lump sum or
- Installment payments over the course of a year (starts from the first payment) that total more than $10,000
- From the same person
- Received in a single or related transaction (defined below)
What is considered CASH?
- US or foreign coins or currency
- Cashier’s checks, money orders, bank drafts or traveler’s checks that are LESS than $10,000 in face value.
What is NOT considered CASH
- Any payment that is drawn out of an individual’s personal account is NOT considered cash. This includes bank wires, ACH payments, personal checks, credit card, debit card or paypal payments.
- It is currently unclear whether BitCoin is considered cash
- Some examples of both reportable and non-reportable transactions are:
Scenario 1:
You buy $12,800 worth of gold coins and silver bars and pay using $8000 in US currency and a cashier’s check of $4,800.
Reportable?
Yes. Since the cashiers check is less than $10,000 it is considered cash. As such, the total cash you have given is $12,800.
Scenario 2:
You buy $12,800 worth of gold coins and silver bars and pay using $1,800 in US currency and a cashier’s check of $11,000.
Reportable?
No. Since the cashier’s check is more than $10,000 it is not considered cash. As such your total cash payment is only $1,800.
Scenario 3:
You buy gold bars for $33,000 and pay using a personal check for $25,000 and $8,000 in US currency.
Reportable?
No. Any payment, regardless of the amount drawn from your personal account is NOT considered cash. The cash payment is less than $10,000
Scenario 4:
You buy gold Canadian Maple Leaf coins for $12,000 and make a payment in US currency for $8,000 on April 2. You make another US currency payment on April 15 of $4,000 and receive your gold coins.
Reportable?
Yes. These are considered installment payments and are combined to total more than $10,000.
A more detailed explanation and definitions can be found on the IRS’s website here
http://www.irs.gov/pub/irs-pdf/p1544.pdf
