| Silver
News
Precious Metals Investors Eager For Capital
Gains Equity - U.S. Congress Looks to Correct Inequity in Tax Code
February 24, 2003
(Washington, D.C. - February 24,
2003) - Key members of the 108th Congress introduced legislation on February 5
that would provide capital gains treatment for precious metals bullion investment
products, including silver, gold and platinum. H.R. 574 was referred to the House
Ways and Means Committee, where one of the bill's principal co-sponsors, Rep.
J.D. Hayworth (R-AZ) is a member. The other original co-sponsor of the bill is
Rep. Jim Gibbons (R-NV), Chairman of the House Mining Caucus. Additional House
co-sponsors have already signed onto the legislation and more are expected. The
United States Senate is expected to introduce companion legislation in the near
future.
The tax code currently defines precious
metals investment products as collectibles, receiving a 28% capital gains rate.
The legislation would take these investments out of the collectible category and
put them on par with other long-term investments, such as stocks and mutual funds,
which receive a 20% capital gains rate if held for one year or longer.
The
bill provides capital gains treatment for precious metals bullion investment products,
including bullion coins and bars. Bullion coins are legal tender coins, issued
by government mints, and are distinct from numismatic coins prized by collectors.
Bullion coins bear a face value that is largely symbolic; its true value depends
on the metal content and the day-to-day changing price for the metal. Bullion
coins provide the investor with an economical way to make precious metals investments
for diversification and portfolio protection purposes. Bullion coins are manufactured
in large quantities and in a standardized uniform manner, making them fungible,
or interchangeable with each other.
Some popular
bullion coins include the American Eagle, the Australian Kangaroo Nugget, the
Canadian Maple Leaf, the South African Krugerrand and the Austrian Philharmonic.
Congressionally authorized by the Bullion Coin Act of 1985, American Eagle bullion
coins have become one of the world's leading bullion investment coins.
Bullion
bars are also covered under H.R. 574. Bullion bars come in a wide range of sizes,
and their weight is measured in troy ounces or grams. Bullion bars are typically
sold at a low premium above the bullion price and can be purchased from select
commercial banks, brokerage houses and precious metals dealers. Bullion products
are liquid investments with a global 24-hour market.
The
Silver Institute is a nonprofit international association. Established in 1971,
the Institute serves as the industry's voice in increasing public understanding
of the value and many uses of silver.
For
Further Information Contact:
Mike DiRienzo
The Silver
Institute
1200 G Street, N.W., Suite 800
Washington, D.C. 20005
Tel:
(202) 835-0185
Fax: (202) 835-0155
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