QUESTION
What are the inheritance deposit in bank reporting requirements?
Asked on Oct 29th, 2014 on Estate Planning - Ohio
More details to this question:
We are to receive an inheritance of over $23,000 by year's end (2014). It is coming from a certificate of deposit. We have heard that there are difficulties depositing such a large amount at one time in a bank due to the Patriot Act and some people have had their bank accounts frozen by the IRS under the assumption that the funds could be from suspicious sources. We want to put the money into a safe investment and then use it to purchase property and the next year or so. That would mean a withdrawal over the $10,000 rule. What are the rules under IRS reporting form 8300 that would apply in such transactions of receiving an inheritance, depositing it a bank, perhaps investing it in gold, silver, precious metals, let it sit, then cashing in the gold, silver, etc. to purchase land?
1 ANSWER
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Ronald K. Nims
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The bank is required to report cash payments over $10,000 to the IRS (there are some exemptions - like businesses that have large cash deposits in the routinely). If your inheritance is from a CD, then the payment will be a check. There is no reporting requirement for checks. If you use the money to buy gold, silver or precious metals, if you sell them for cash, the bank would have to report the deposit if it's in excess of $10,000. Since gold, silver and precious metals are TERRIBLE investments, it's unlikely that you'd have $10,000 out of a $23,000 investment. There is no market for consumers to sell gold, silver or precious metals. When a consumer wants to sell these items, he or she will have to take a huge discount from the market price (usually over 30%) and will have to pay fees to assay the metal (which means to have an expert analyze to determine the chemical composition), you'll have to pay a re-melting fee (whatever form your gold is in the buyer will want another form and you'll have to pay for changing it) and you'll probably have to pay a service charge. If you really, really believe that these are a good investment, instead of spending the whole $23,000, just buy one gold coin or bar - THEN TRY TO SELL IT. If you want to buy gold, etc. because you believe the world is going to hell in a handbasket and paper money will be worthless - that's your call but it's not an investment, it's an expense.
Answered on Nov 03rd, 2014 at 4:06 PM