Solved: Entry for precious metals capital gain/loss

quintin_s_smith · ‎12-06-2019

My client bought and held silver for several years as an investment. They sold it for a loss in 2017

The Canadian dealer provided an invoice for the purchase and the sale.

From this, I entered the purchase date and cost basis - the sale date and proceeds.

I indicated a 1099-B was NOT provided.

I checked the box indicating the transaction relates to collectibles (per IRS Sch D instructions, line 18, collectibles = silver bullion).

Is this the correct entry - do I need to think about anything else?

Should I scan and attach the 2 "invoices" from the metals dealer/broker that provide the dates and dollar amounts?

Thanks.

itonewbie · ‎12-06-2019

Your entries should flow to Sch D from F.8949 with Code C reported in column (f). This will cause the gain to be subject to a max rate of 28% instead of the usual LTCG rates. You won't have to attach the invoices but should ask your client to retain those in case they get audited. Assuming these transactions were carried out in CAD, spot rate would be used for conversion to USD as the functional currency.

In addition to cap gain, you may also need to account for §988 gain, which provides for a $200 exception; again, my presumption is that your client was paid CAD and would exchange that into USD at some point.

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Still an AllStar

View solution in original post

itonewbie · ‎12-06-2019

Your entries should flow to Sch D from F.8949 with Code C reported in column (f). This will cause the gain to be subject to a max rate of 28% instead of the usual LTCG rates. You won't have to attach the invoices but should ask your client to retain those in case they get audited. Assuming these transactions were carried out in CAD, spot rate would be used for conversion to USD as the functional currency.

In addition to cap gain, you may also need to account for §988 gain, which provides for a $200 exception; again, my presumption is that your client was paid CAD and would exchange that into USD at some point.

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Still an AllStar

quintin_s_smith · ‎12-06-2019

Very helpful. Thanks itonewbie!

itonewbie · ‎12-06-2019

No problem, @quintin_s_smith

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Still an AllStar

Entry for precious metals capital gain/loss

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