When you think about investing, you may lean more toward stock market options rather than the gold standard — but investing in gold may come with a few rules that will surprise you. For those new to the scene, it’s important to learn about these quirks and strange laws so you don’t find yourself on the wrong side of it when buying gold.
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For example, the 1933 Double Eagle gold coin, minted but never legally circulated, is considered government property and therefore illegal to own. In fact, owning one of these rare $20 coins today is not just illegal but may result in confiscation. This makes the 1933 Double Eagle a captivating yet untouchable part of gold coin history.
For this reason among many others, the price of gold investing isn’t just about market trends and analysis — it’s also about navigating a landscape filled with unique legal rules. These rules have shaped gold investing over the years, making it a fascinating area for investors who are aware of its legal intricacies. Here are four strange rules of gold investing.
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Rule 1: The Gold Ownership Ban During the Great Depression
From 1933 to 1974, owning gold was not just a financial decision but a legal matter in the United States.
President Franklin D. Roosevelt and the government signed Executive Order 6102, which banned private gold ownership as part of its strategy to tackle the Great Depression, requiring citizens to turn in their gold to the Federal Reserve. This dramatic rule reshaped the American investment landscape for over four decades.
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Rule 2: Reporting Large Gold Transactions
In the modern era, gold ownership is unrestricted, but large transactions aren’t free from the watchful eyes of the IRS. Any gold sale or purchase exceeding $10,000 must be reported. This rule is designed to maintain transparency and ensure tax compliance, adding a layer of responsibility for large-scale gold investors.
So, how much gold can you legally own in the U.S.? In the United States, there is no legal limit on the amount of gold you can own. Since the lifting of ownership restrictions of the Gold Reserve Act in 1974, individuals are free to buy, own and possess as much gold as they wish.
Rule 3: Customs Duties on Gold Imports
Importing gold into the United States comes with its own set of rules, including customs duties. Typically, a duty of around 3.9% is levied on gold imports, a policy aimed at regulating the flow of precious metals into the country. This rule necessitates that investors declare their gold imports and pay the required duties, ensuring legal compliance.
Rule 4: Exemptions for Collectible and Rare Coins
One of the more intriguing aspects of gold investing laws is the exemption for collectible and rare coins. Even during the height of the gold ownership ban, collectors could legally own rare gold coins. This exception not only offers a fascinating loophole but also underscores the diverse nature of gold investing and the importance of understanding its legal nuances.
Investing in Gold Today: The Basics
Gold investing in the modern era is a blend of historical awareness and current legal compliance. Whether you’re a newcomer or a seasoned investor, understanding these aspects is vital for successful gold investing. Here’s what you need to know:
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Gold forms: Gold investments come in various forms like gold bullion, coins and exchange-traded funds. Each has its own market dynamics and legal considerations.
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Market trends and risks: Keeping abreast of gold market trends and understanding the associated risks is crucial. This helps in making informed decisions on when and how much to invest.
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Choosing the right vehicle: Depending on your investment goals and risk tolerance, select the appropriate gold investment vehicle. Options range from physical gold to gold-related securities.
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Working with reputable dealers: Engaging with reputable dealers is key. They can provide valuable advice, ensure legal compliance and offer authentic investment products.
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Staying informed legally: Keep up to date with laws and regulations governing gold investments. This includes understanding tax implications, reporting requirements and any restrictions on gold transactions.
Final Take To GO
The realm of gold investing is filled with rich history and unique regulations. From the legendary 1933 gold coin to the complexities of modern gold ownership laws, understanding these aspects is essential for anyone involved in gold investing.
Whether for diversification or preservation of wealth, gold forms including bullion, coins and bars continue to be a captivating, shiny asset in the investment world.
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This article originally appeared on GOBankingRates.com: Investing in Gold: The 1933 Coin That’s Illegal To Own and Other Strange Rules
