A2A with Dave Kranzler

69

Earlier today, our pal "Denver" Dave stopped by for a terrific, one-hour discussion of current events and the precious metals. Great stuff from a wise and experienced analyst. Please make the time to listen.

Just some of the topics covered in this podcast:

  • the real state of the US economy and why the bureaucrats and MSM are working so hard to maintain the illusion
  • the cesspool of global derivative bets that threaten to collapse the financial system at a moment's notice
  • the state of the US housing sector and why some homebuilders will never recover
  • the prospect making gold ownership illegal and/or outright confiscation by governmental authorities
  • much, much more

And here a just a few examples of some of the great work that Dave has recently posted to his site:

I'm confident that you'll enjoy this show and find it a valuable use of your time.

TF

  69 Comments

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Jun 12, 2015 - 1:01pm
Texas Sandman
Jun 12, 2015 - 12:36pm

Heard of that case

The Kahre one. The one concerning the liberty dollar is considerably more obnoxious and about enough to make me think it's time for angry mobs to descend on capitol hill with pitchforks and torches.

Bohemian
Jun 12, 2015 - 12:33pm

@Orange...

I think you might have a good argument with the tax people, if you show them your dated bill, that you have bought $50 gold piece for $50 from someone, for example -- from a coin dealer or the state mint (right?), and you were willing to use it as a legal tender, buying with it goods or services, sold for $50... Otherwise, the legal tender argument is theoretical. The face value is a tricky thing. Try that with old post stamps, with the face value 2-3 cents. They might be worthless, maybe one cent or so, and they might have a book or "catalog value" of several thousand Dollars, or even much more. Tax people know this game. Some states consider not declared post stamps on their borders as an illegal transfer, a form of smuggling (of financial instruments) and tax/duty avoidance. It's hard to detect a small piece of paper with a face value 2-3 cents, and a market value $100,000, without any electronic trace. ;-) And of course, the border agents are not familiar with this market...

Anyway, as I see it, by declaring a loss, you are ASKING tax people to allow you to lower your taxable income. They might allow you to do that, or not. They might test your case, of course, so -- the first thing would be, that they would want to see the proof of your purchase (of that asset, your coins, stamps, fine arts, e.g.). A gold coin with a face value $50, purchased for -- how much, $50, as a legal tender? Well, you should have the proof, that dated bill. If not, well... it is out of your hands. No loss.

Orange
Jun 12, 2015 - 12:02pm

oops

I guess the case continued, and now the guy is in jail.

The appellate court also upheld Kahre’s sentence of 190 months imprisonment and three years of supervised release. Kahre had also been ordered to pay restitution of over $16 million, of which Lori Kahre (72 months imprisonment) and Alexander Loglia (26 months imprisonment) were jointly and severally liable for nearly $11 million. [This case is United States v. Kahre et. al, Nos. 09-10471, 09-10528, 09-10529, and the opinion can be found here].

Hence, Bad idea.

Orange
Jun 12, 2015 - 11:56am

Thanks for the comments

I found this case, where an employer was paying in gold and silver legal tender.

Here is the last paragraph and link.

https://www.rapidtrends.com/robert-kahre-vs-the-irs-and-doj/

“If a coin says it is a $50 gold piece, and it says ‘In God We Trust,’ and the law says that it is legal tender, and it is in circulation, isn’t it reasonable for people to think that they can calculate their tax liability based on that?” Hansen asks. “If a tax accountant can’t answer that question, how can a common worker be guilty of a crime? The outcome of this case is a magnificent victory for those of us who believe that the United States of America should have an honest monetary system.”

matt_
Jun 12, 2015 - 11:21am

Legal tender

Orange, I am not a tax expert, but what you are describing is bartering, not an exchange using legal tender. The legal tender value of an ASE is $1, so someone selling a $2 cup of coffee can legally sell it to you for 2 ASEs. If you bought the ASEs for $20 each, you would have realized a true net loss of $38 that you could write off on your taxes. It would be dumb, of course, because you are out 2 ounces of silver worth much more than a cup of coffee. In addition, as CPE said, the IRS may consider that a route to circumvent gift laws.

If you used the 2 ASEs to buy 20 cups of coffee worth $2 each, then your transaction doesn't have anything to do with the face value of the coins. It becomes a barter transaction. For bartering, you are obligated to report the value of what you traded and report any gains and losses from every barter exchange. If you originally bought the 2 ASEs for $10 each, and exchanged them for $40 worth of coffee, you'd have to report a capital gain of $20.

Texas SandmanOrange
Jun 12, 2015 - 11:13am

Tax Loss?

As Silver Eagles are legal tender, if I pay $20 fiat for one and hold it as an investment, can I record a $19 tax loss?

Well, you can do anything you want. But with this one, I have a pretty strong feeling you'll get the "wesley snipes" treatment.

Orange
Jun 12, 2015 - 11:08am

CPE

I certainly would not want to risk going to tax court.

I do wonder if I have to sell to establish a loss as the value is stated as $1. Perhaps I could spend it in those States that are accepting silver at the market rate. Like the gas station that accepted a pre 1964 quarter for a gallon.

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CPE
Jun 12, 2015 - 10:56am

@Orange

To claim a tax loss, one must sell. If you sell a $20 asset for $1 then you may run into gift taxes as you sold it below market value.

The above is the party line, there are holes in the argument, but you should be prepared to fight the tax man if you want to go down that route.

Even if you have the moral or legal high ground, by claiming a tax loss you have subjected yourself to tax court if questioned which is a lot like kangaroo court. Welcome to Amerika.

Orange
Jun 12, 2015 - 10:52am

Legal Tax Expert Question

As Silver Eagles are legal tender, if I pay $20 fiat for one and hold it as an investment, can I record a $19 tax loss?

I expect the answer is no however it would be interesting if there are any Turdite tax experts that can provide some insight into this.

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