Are found treasures taxed?

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shining sun
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Are found treasures taxed?

Post by shining sun » Wed Sep 29, 2010 9:11 am

Hi everyone!
I've been wondering, if someone finds one of those legendary treasure troves or if I on my next hiking vacation trip over that 50lb "early retirement nugget" does it get taxed for just keeping it or only if one cashes it out? Or is it taxed at all? I'm curious about this, although the only treasures I seem to find (or find me)seem to be homeless cats! (8 of them on the place). However, I did get a gold pan for my next trip in the spring!
shining sun, fledgling prospector

Jim Hatt

Re: Are found treasures taxed?

Post by Jim Hatt » Wed Sep 29, 2010 12:46 pm

SS,

There are some variables, for certain circumstances, but it basically comes down to this. If you use that 50 pound nugget for a door stop. You will never have to pay any Taxes on it. But... If you sell it... You are "supposed" to claim it as income.

Best,

Jim

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Re: Are found treasures taxed?

Post by gollum » Wed Sep 29, 2010 7:10 pm

It's my understanding that if it is raw ore or a nugget found on private land that you don't have to declare it as income until you cash it in.

If the find is in a National Park or other Public Lands that require government permission to recover, then it is a whole nuther can-o-worms.

Here is my formulae for Treasure Trove Recoveries:

Say you find a Treasure Trove (gold/silver coins or plate). DON"T DIG UP ANY OF IT TO SHOW AS PROOF TO THE FEDS! Take pictures. Get all your ducks in a row, gather all your evidence and present it to the BLM Ranger or whichever Government Entity necessary.

Also, get a good attorney. He will have to negotiate your Treasure Trove Deal with Uncle Sam. The best you will hope to get will be a 50/50 split with Uncle Sam taking his right off the top. You will have to pay for ALL expenses out of your half or your pocket.

You will be required to provide a non-refundable fee to begin the process (either $200-250 currently). You will also have to provide an Archaeological Survey of your site to insure you won't be violating anything of historical importance (at your cost).

You will also have to file a plan of operation in which you must describe what equipment you will need to get to your treasure trove. The heavier the equipment, the less likely you are to get approval.

Also, based on how extensive your Plan of Operation is, you will have to file a Reclamation Bond. This is to cover the cost of returning your excavation site to its' previous state if you run off. Even if you do all the reclamation, don't count on ever seeing a penny of this again.

If they believe your evidence (and it had better be compelling), they will give you permission to search your site. Permission to search but not to remove anything.

When you actually find your Treasure Trove, you are required to report it at once. At this point, you will have some representatives from Uncle Sam on site to be sure he gets his fifty percent.

So, what I am saying is that if you do everything legally and by the book (and everything goes your way with no nasty surprises), you can expect to see a net of about 1/8th to 1/4 of the total value of your Treasure Trove.

$1,000,000 total value

- $500,000 Uncle Sam

= $500,000 for you

- $25,000 reclamation and Archy Survey

- $25,000 equipment rentals and misc $$$ spent on recovery

= $450,000 for you

- $90,000 (approx 20% for attorney fees) Don't skimp here (most important $)

- $$$? Do you have any partners?

= $360,000 for you

- $180,000 (did you forget that this wealth puts you in 50% tax bracket?)

= $180,000 for you, from the original $1,000,000

On the other hand, if you get greedy and want it all, you could lose it ALL and spend a few years in jail.

Best-Mike

Jim Hatt

Re: Are found treasures taxed?

Post by Jim Hatt » Thu Sep 30, 2010 4:39 am

Morning Mike and thanks for the breakdown.

This a subject that I have given a lot of thought to, but do not have any actual experience, or case history for.

Do you know of any actual cases where this has happened in the way you have described it?

The only thing I can think of is the Mel Fisher case (which was an offshore recovery, and I have no idea if that is the same as a discovery on dry land)

I do know that Mel fought his case all the way to the Supreme court which ended up ruling in his favor, and gave him 100% of the treasure, and the Feds and State, got 0%.

Best,

Jim

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Re: Are found treasures taxed?

Post by Kloyd Niel » Wed Oct 13, 2010 6:49 pm

Hello Guys,


I found the below in a tax outline. Is sentence #2 correct? Does this mean if you find gold nuggests with say a FMV of $100 and then sell them for $100 less the amount is not taxable? Would the same be true if you found alumnimum cans on the side of the road?

Found treasure: taxed – any accession to wealth that you have complete dominion over is taxable (Reg. 1.61-14) In the case of non-cash (e.g., gold nuggets), taxed when sold w/basis of FMV when found .





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Re: Are found treasures taxed?

Post by GeorgeW » Wed Oct 13, 2010 7:18 pm

I'd need to see more of the section where you found that. It could be referring to two different types of taxation, income and capital gains. Here's an example. Let's say I found a nugget in 1977 which was worth $100 at that time. The IRS would want me to pay taxes on that and the basis would be $100. If I sold that nugget today for $400 then the gain of $300 would be a capital gain and taxed at capital gains rate which is less than the rate for regular income.

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Re: Are found treasures taxed?

Post by historik951 » Tue Jan 18, 2011 10:34 pm

Gotta tell ya, the thought of re-smelting it and selling small pieces at a time to jewelers or pawn shops becomes very inviting.... Or even trading it for $20 double eagles..... and I know that's not right, but the chance of me finding any " real " treasure is just as remote...

Historik951

Jim Hatt

Re: Are found treasures taxed?

Post by Jim Hatt » Mon Feb 21, 2011 5:29 pm

historik951,

From what I have been seeing lately... eBay seems to be the best place to sell raw gold these days.

Best,

Jim

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Re: Are found treasures taxed?

Post by goverton » Thu Nov 24, 2011 4:13 am

Jim Hatt wrote:historik951,

From what I have been seeing lately... eBay seems to be the best place to sell raw gold these days.

Best,

Jim
Ebay reports to you know who on all sales!
got to be quite and sell without notice

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Re: Are found treasures taxed?

Post by shining sun » Wed Dec 12, 2012 2:43 pm

I wondered about this topic several years ago and even though I have never found any treasure or gold I still wonder about a few things. Some of the laws applying to this seem quite un-American. Why would a person have to pay taxes on something they find on their own land? For that matter on public land, since a person, being part of the public, owns that too? (This according to American law. Personally, the concept of owning anything in the universe is questionable, but that is a philosophical issue :P ) I'm ABSOLUTELY all for environmental laws protecting the land, but if a person supplements their income with a little panning or discovers a placer in their back yard, it's nobody's business but theirs, and it should NEVER be taxed. It only becomes an issue if environmental disruption occurs because of excessive greed. I'll bet in areas where you buy land and don't own the mineral rights, you even have to file a claim to dig on your own property (I'm not sure about this though). Such are the musings of a future respectful desert dweller who would like to keep what she finds, maybe supplementing meager retirement :lol:
Shining sun

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