By Texas Parole 
When you inherit gold coins or decide to sell precious metals, understanding the legal framework protects you from potential problems. Texas law treats gold and coin transactions differently than regular sales, and knowing these distinctions helps you avoid costly mistakes.
Texas Property Laws and Precious Metal Sales
Texas recognizes gold coins and bullion as personal property under state law. This classification affects how you report sales, pay taxes, and transfer ownership. The Texas Property Code Section 70.001 establishes that precious metals constitute tangible personal property, which means specific rules apply when you sell them.
Professional buyers follow strict compliance standards set by state and federal regulations. Reputable dealers like Waco Coin Buyers maintain proper licensing, follow anti-money laundering protocols, and provide documented transactions that protect both parties. These legal safeguards ensure your sale proceeds smoothly and within the bounds of Texas law.
The Uniform Commercial Code (UCC), adopted by Texas, governs most precious metal transactions. Article 2 of the UCC covers the sale of goods, including gold and silver. This framework establishes when ownership transfers, what constitutes a valid sale, and how disputes get resolved.
Read Also: Co-Owning Property in LA?
Reporting Requirements and Tax Obligations
The IRS requires specific reporting for certain precious metal transactions. Form 1099-B applies when you sell 25 or more ounces of gold bars, certain gold coins in quantities of 25 or more, or silver bars totaling 1,000 ounces or more. These thresholds trigger mandatory reporting by the dealer.
Capital gains tax applies to precious metal sales. The IRS classifies gold and silver as collectibles, taxing gains at a maximum rate of 28% for long-term holdings. Short-term gains (assets held less than one year) face ordinary income tax rates. Keep records of purchase dates, amounts paid, and sale proceeds to calculate your tax liability accurately.
Texas has no state income tax, which simplifies your tax obligations compared to other states. You only need to worry about federal requirements. This advantage makes Texas an attractive state for precious metal transactions.
Documentation and Proof of Ownership
Legal sales require proper documentation. Here’s what you need:
Proof of ownership: Receipts, invoices, or inheritance documents establish your right to sell. Without proper documentation, dealers may refuse transactions or offer lower prices due to increased risk.
Valid identification: Texas law requires buyers to verify seller identity. Bring a current driver’s license or state-issued ID. Some dealers photograph IDs and sellers as part of their compliance procedures.
Transaction records: Legitimate dealers provide detailed receipts showing item descriptions, weights, purities, and prices paid. Keep these records for tax purposes and potential future disputes.
Anti-Money Laundering Compliance
The Bank Secrecy Act requires precious metal dealers to report cash transactions exceeding $10,000. This federal law helps prevent money laundering and tax evasion. Dealers must file Form 8300 with the IRS within 15 days of receiving more than $10,000 in cash.
Structuring transactions to avoid reporting thresholds constitutes a federal crime. Never split large sales into smaller amounts to bypass reporting requirements. Penalties include fines up to $250,000 and five years imprisonment.
Licensed dealers maintain Customer Identification Programs (CIP) as part of their anti-money laundering compliance. They verify customer identities, maintain transaction records, and report suspicious activities to authorities.
Estate and Inheritance Considerations
Inherited precious metals receive special tax treatment. The IRS allows a “stepped-up basis,” meaning your cost basis becomes the fair market value on the date of death. This provision can substantially reduce capital gains taxes when you sell inherited items.
Texas probate law affects how you inherit precious metals. Items passing through probate require court approval before sale. Assets held in trust or with designated beneficiaries bypass probate, allowing quicker access and sale.
Community property rules apply in Texas. Precious metals acquired during marriage typically belong equally to both spouses. Both parties must consent to sales of community property, unless one spouse has power of attorney or other legal authority.
Choosing Legal and Legitimate Buyers
Research potential buyers before selling. Check for:
Business licenses: Texas cities require precious metal dealers to obtain specific licenses. Verify current licensing through city business registration offices.
Better Business Bureau ratings: Look for established businesses with positive track records and resolved complaints.
Industry associations: Members of professional organizations like the American Numismatic Association follow ethical guidelines and industry standards.
Physical locations: Legitimate buyers maintain permanent business addresses. Avoid buyers who only meet in parking lots or temporary locations.
Protecting Yourself from Fraud
Common scams target precious metal sellers. Watch for these red flags:
Buyers who pressure you for immediate decisions often hide unfair pricing or terms. Legitimate dealers give you time to consider offers and seek second opinions.
Bait-and-switch tactics involve advertising high prices then finding excuses to pay less. Get written quotes before committing to sales.
Check weight measurements yourself when possible. Some dishonest buyers use rigged scales or incorrect testing methods. Ask to see scale certifications and testing procedures.
Legal Recourse for Disputes
Texas law provides several avenues for resolving transaction disputes:
Small claims court handles disputes up to $20,000. You don’t need an attorney, and cases typically resolve within 60 days.
The Texas Attorney General’s Consumer Protection Division investigates deceptive trade practices. File complaints online or by phone when dealers violate consumer protection laws.
Civil litigation remains an option for larger disputes. Texas courts have jurisdiction over precious metal transactions occurring within state borders.
Next Steps
Before selling gold or coins, gather all documentation proving ownership and establishing value. Research current market prices through reliable sources like the London Bullion Market Association or major commodity exchanges. Get multiple offers from licensed, established dealers to ensure fair pricing.
Understanding the legal framework surrounding precious metal sales protects your interests and ensures compliance with applicable laws. Professional dealers follow these regulations automatically, making your transaction safer and more straightforward. Take time to find reputable buyers who operate within legal guidelines and provide proper documentation for your records.
You May Also Like: Clarifying Claims About Augusta Precious Metals