I’ve communicated with someone from Hoover and Strong and I think I’ll send the rest of my gold scrap to them. They accept personal scrap. Has anyone had trouble with the amount of loss from them?
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When I send in scrap, which isn’t very often, I have sent it to Hoover and Strong. They accept sweeps and polishing duff. I have never had a problem with their settlements. I do live about 140 miles from Elemental in Buffalo and may drive a small amount of 14K scrap to them. Many people speak well of Elemental. Hoover and Strong started in Buffalo, but moved to Richmond years ago. I toured Hoover and Strong with my Dad in 1969 when I was a student at the University of Buffalo…Rob
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who do you recommend? Elemental or Hoover and Strong… I’m out in the boonies… Elemental in Denver is the closest place to go… still 400 miles away… However, I do pass through Denver on my way to Albuquerque… I could drop my stuff off there… there’s a LOT of stuff to get refined… pounds of silver and several ounces of gold.
I am not a real good resource here. I used to do a lot of refining before I purchased what tools I needed to recycle metal and, more importantly, figure out how to do it. Now I send a small bit of sweeps, grinding swarf, polishing duff and small bits of metal to Hoover and Strong every 2 - 3 years. I do have a fair amount of 14K to send in that I may drive to the Buffalo Elemental store. It is only about 120 miles away. You can call any of the refiners and ask about their practices and what they will pay. In the end, it is a crap shoot. Yesterday silver was $30/ounce. Today is is $31. You can drive yourself crazy trying to time it. I once sent a lot of scrap to Hoover and Strong in Richmond because the spot was very high. I made the mistake of sending it in a box that very clearly indicated that wine had been shipped in it previously. While my post office had no trouble sending it, the post office in Richmond would not accept it because it had wine in it previously. It was sent back for me to cross off any evidence that wine had been shipped in the box and then the Richmond Post Office would deliver it to Hoover and Strong. By then the spot for silver had retreated and I missed out on making what I expected to make. Such is our life. Good luck…Rob
Thanks Rob!
I bought silver scrap from a metals dealer. He in turn purchased it from Native American silversmiths…this was ages ago, cuttings and scrap sold for $1.50 to $2.50 per ounce… I bought it by the pound, melted it down into rough ingots…I experimented with “fire refining”… because I had an oxyacetylene cutting torch that had central oxygen jet, I was able to make “spitting silver”… the copper was burnt out into the flux by the oxygen jet. Pure silver can absorb over 20X its volume in oxygen…as it cooled, large bubbles of oxygen would exsolve from the metal making it “spit”…all of this had to be done outside on a tile table top…most of the time the bubbles just popped but occassionally a few molten droplets were thrown out. In addition, I also acquired for free, medical electrodes that were gold plated on a base of fine silver, another three or four pounds more. separating the gold plate from the silver was not cost effective. Reagent grade acids and other chemicals cost a lot more than any gold recovered… I was able to recover a few bits but definitely not cost effective. The rest of the gold was coin gold, alloyed down to 18K… I still have a few ounces… All of it has to go… I’m having everything refined to investment grade bullion. The premiums on hallmarked bullion is steep, however, if exchanged for cash, I’d have to pay a lot of capital gains tax… I can keep the bullion as prices for silver and gold rise… In terms of inflation, since I bought the metals, I’m just going to break even or lose some to refining fees.
one dollar in 1970 is $8.17 today… the price of silver was 1 dollar an ounce in 1968. Silver certificates redeemable in silver at one dollar an ounce were discontinued in 1968…one dollar in 1990 is now $2.41 today… I bought most of my silver in the early 1990’s. assuming the average price was $4/ oz (actuallly lower for scrap at $2.50/oz)…at the current price of silver of $31/oz, I gained rougly 15X the value…assuming a 20% refining fee, less $4/oz selling at retail, less $4/oz for bullion, the net gain would be $16/oz… still 4X the cost of buying…calculations for gold give similiar results…
We can all assume that inflation will continue at an average historic rate of 4% per year…gold and silver will continue to increase proportionately… everything will double in less than 20 years, including the price of food.
Just a follow up… I was able to recover my EIN number but the spelling of my name was wrong. It took 4 months for the IRS to correct it, after multiple written requests…
Have you sent your metal to a refiner yet? If yes, are you going to get a 1099 tax form from them? With money laundering prevention, etc., I think refiners have to file tax documents if the dollar amount meets or exceeds a certain level. There may also be different rules about scrap refining versus selling bullion or coins to a refiner. Please let us know if you find out anything interesting, especially since you’re dealing in large amounts of metal. Thanks, Donna
I haven’t had much time so I haven’t sent the metal in yet. As I understand it through my accountant, it’s my responsibility to file a 1099. The threshold for gold is, I believe, $10,000, the same as a cash transaction. The same should apply to diamonds and other precious stones of high value. The refiner reports to the IRS cash and cash equivalent transactions with Form 8300. Any business, including autodealerships, jewelry stores, that recieve cash more than $9,999.99 must file form 8300.
It’s not in this thread, but somewhere in a similar thread, Jo said that when she sends scrap in for refining, she gets fresh metal back, not cash in return. She said that if she gets clean metal back, there’s no tax implications, but if she gets cash, then she has to report it as income and pay taxes on it. That doesn’t sound like it will help jsfandskh’s situation, but I thought it was really good advice for many of us.
Cheers!
Jeff
I have talked to a couple of refiners. Elemental is the closest to me and has reasonable fees. I intend to have my precious metal supply refined into investment grade one ounce bars. The cost for investment grade bars is high- about $4/ one ounce of silver. By exchanging like for like, rather than for cash, I won’t need to report capital gains to the IRS. My basis will be reset to the current cost…Investment grade gold and silver bars are liquid and can be exchanged for cash at anytime, piecemeal… I intend to hold them as physical investments. I also have physical gold in my investment account. I bought gold bars that can be taken delivery of, however holding them in the investment account is cheaper than renting a bank safety deposit box. Since I can get spot price for precious metals within my investment account, my original intent was to have them delivered piecemeal to alloy down to 18 and 14K gold for jewelry.
Thanks for your helpful reply. I do have to consider the tax angles. Being retired with no source of income other than social security and investment income makes it a full time job to manage.
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gold hit a historic price of 3,325 USD per troy oz…central banks are hoarding gold due to uncertainty with US economic policy. Gold has high demand and is also driven by dollar weakness… silver is still languishing in the low 30’s per oz., due to lack of projected industrial demand. Precious metals are so far tariff exempt… oil prices are stuck in the low 60’s… any rise in the price of oil is due to dollar weakness. Hang on to your gold!!!
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I would be making a like-kind transaction, 1031 exchange (mostly used in real estate swaps)… If I take payment in cash, I would be liable for long term capital gains. Precious metals are considered both cash equivalents and collectibles by the IRS. Collectible long term capital gains are taxed at a higher rate than other asset classes at 28%… an additional 3.2% excise tax depending on income…this would generate form 1099B… In addition, if there is a cash payout, anything above $10,000 per year is reportable by the refiner as a cash transaction, . Form 8300 has to be filled out by the refiner and reported to the IRS, including my identity… If I’m correct, a like-kind exchange will not be taxable, but reset my basis to the price of metals at the time of refining…I have no intent to sell hallmarked fine gold and silver within a year (short term capital gain or loss, treated as ordinary income)… my intent is to hold on to them for the long term as who knows what the inflation rate will be over my expected life time? The total amount of money at today’s prices is scarely worth quibbling about… $15,000 at the most (25 pounds of pure silver is $10,200 at current price)…I can avoid the 10K per year limit for 8300 reporting, by splitting my stash into equal yearly lots.
Does anyone out there who does commercial work know whether sending scrap in, in exchange for fine metal pay taxes and if so how much?
I did some research into the tax code. Like-kind exchanges were limited to only real estate exchanges in 2021. Precious metals are treated both as cash in amount over 10K… a form 3800 is filled out by the buyer and reported to the IRS… the seller’s identity is disclosed… Exchanging gold and silver requires a basis of the metal at the time it was first acquired. Long term capital gains are taxed at 28% for all collectibles including precious metals, antiques, artwork, jewerly, anything that can be collected… As I don’t have the reciepts, the IRS will accept a good faith estimate of the value whe first bougth, to tax capital gains…no matter what the quantity, the refiner will report a like-kind exchange to the IRS… Death and taxes are unavoidable… the 28% long term capital gains tax rate on collectibles is to discourage people from investing in them… that tax rate is higher than my marginal ordinary income tax rate. Death and taxes!!! I’ve done a real estate exchange in the past with no tax consequences…these are extremely valuable since my basis had increased by 100K… both physical gold and gold in ETF’s are taxed at the higher capital gains rate… can’t win!!!
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