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Tax Free Exchanges
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Tax-Free Exchanges
Instead of selling coins and paying taxes, it is possible, under the right conditions, to trade coins for other coins and avoid paying taxes. This is called a like-kind exchange.
An exchange is tax-free if both coins represent the same type of underlying investment. An exchange of bullion-type coins for bullion-type coins is a tax-free like-kind exchange. An exchange of silver bullion for gold bullion, however, is not tax-free. Silver and gold bullion represent different types of property. Silver is an industrial commodity, whereas gold is primarily an investment in itself. Similarly, an exchange of South African Krugerrands for U.S. gold collector's coins are also not tax-free. The Krugerrand is valued based upon its metal content whereas the U.S. gold coins are valued based on age, condition, artistic merit, etc.
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