The Gold Rush has arrived! With the price of gold continuing to rise, soaring above $1200 per ounce, the gold hype has everyone wanting to sell, buy or invest in gold.
The mere fact that “cash for gold” shops have sprouted in increasing number throughout the country is proof of just how much interest is there for the precious metal.
Amidst this gold hype, we need to remember some tax rules that apply in dealing with the buying, selling and investing in gold. As the CRA has mentioned, tax rules governing the profit and fees associated with investing in actual gold can be quite complicated and confusing.
First off, the general rule is that the CRA allows you to choose how you want your gains and losses on the sale of commodities, including gold, to be treated for tax purposes, whether it is an income or a capital account. Keep in mind that once you have chosen either income or capital treatment, you must follow this method consistently for all future commodity trades.
For those who choose to report on income account must include any profits from sale as income. Therefore, if they incur a loss from the sale of a commodity, that loss can be used to offset any source of income.
For those who choose to report gains from commodity transactions on capital account, only 50% of their capital gain is taxable and any losses on the sale of a commodity will be treated as capital losses which can only be used to offset other capital gains.
In terms of buying and selling gold, if the taxpayer chooses to report gains from the sale of gold on capital account, any interest expense on money borrowed to buy gold, as well as maintenance fees to hold the gold, cannot be added to the adjusted cost base of the property. On the other hand, if the taxpayer chooses to report the profit of selling gold on income account, both the interest and maintenance fees can be deducted as expenses.
Source: www.financialpost.ca
If you are interested in acquiring gold, you can contact Kustom Design by phone, 403-2190602, or by email, This e-mail address is being protected from spambots. You need JavaScript enabled to view it .