The Advantages of Gifting Precious Metals You Own to Family Members

Precious Metals InvestingRecycle Precious MetalsSmelting and Refining
Written By Barry Lenson

There are many ways to enjoy financial advantages from the precious metals you own. You can have Specialty Metals Smelters and Refiners process your gold scrap, silver scrap and platinum scrap, and have us send you a check for the value of the metal they contain. But there are other ways. You can fund your IRA or other investment accounts with precious metals, donate them to your preferred charity – and the list goes on and on.

But there’s another way to benefit from your precious metals – one that many people do not consider . . .

You can give some of your precious metals to relatives.

Most of the time, people think that gifting valuable assets means giving them to their children. Of course, you can give valuable assets to your kids. But you can also give assets to your parents to help them buy a house or pay retirement costs. You can give assets to a cousin or a friend who is buying a business. There are many possibilities – and many benefits – from giving things away.

Remember that one of the most compelling – and effective – tax-reducing gifting strategies is to give away assets before you die, as part of your estate plan. If you give each of your children $15,000 in cash, for example, they will get that money outright and it will not be included as part of your estate. (See “How Much Can You Give Away?” below.)

Speak with Your Attorney and Estate and Tax Planning Professionals First

Be sure to do that. Also, please remember that the advice we provide in this blog post is for informational purposes only – we are providing only some ideas, not financial advice.

But with that said, here is some information that might interest you if you are determined to use the value in your gold, silver and platinum to benefit not only yourself, but your family.

How Much Can You Give Away?

This gets a bit complicated, but the IRS allows you to gift up to $15,000 a year to any one individual recipient. However, there is no limit to the number of recipients you can give to. Your accountant will report these gifts on IRS form 709.

Can You Only Give Assets to Relatives?

No, you can give gifts to anyone. But again, speak with a  qualified professional before moving ahead.

Know the Cost Basis of What You Are Giving

This is true no matter what you are giving someone – a house, some stock, a painting. In general, the cost basis is what you paid for what you are giving away or. If you bought a house for $200,000 and it is now worth $300,000, for example, the cost basis remains $200,000.

This also gets complicated. If you give someone an asset that has a cost basis of $200,00 and they then sell it for more than that amount, they could have to pay tax on the difference. But that is a matter for them to discuss with their tax preparers.

Determining the cost basis of precious metal scrap, in particular, is not a simple process. (It’s not like determining the value of 10 shares of stock that you bought for $1,000, and which are worth $3,000 now.)

Again, the final determination of cost basis should be made by your attorney or accountant. But if you would like to discuss what your precious metal scrap is worth, call our precious metal consultants at 800-426-2344 and we will explain how we can test it for you. In general, remember that what you paid for precious metal scrap – just like any other asset – will generally be the cost basis. That can be advantageous but speak with a qualified advisor to learn more.

Barry Lenson
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