Geographic Diversification and Reporting Overseas Gold
June 19, 2013
As part of the Permanent Portfolio, it’s recommended you store some assets outside the country where you live (preferably gold for a variety of reasons). This is primarily for protection against manmade or natural disasters that affect where you live or even political risk like war and civil unrest that could happen.
We cover this topic extensively in our book and give some really simple ways to put some gold overseas even if you can only afford a single gold coin at first.
A topic came up recently about the need to report these accounts and there is a ton of bad information on the Internet about it. Indeed, this may be more of it. But basically the reporting requirements for overseas assets for U.S. persons is very strict and the penalties for not doing it are severe.
In my non-CPA and non-Tax Attorney opinion I like to play it very safe. If the financial institution is accepting money and buying/selling gold for you and storing it directly then they qualify for reporting. That’s my opinion after researching this topic and talking to knowledgeable experts about it. So, report it. Tax courts are notorious for guilty until proven innocent. Do you want the hassle? I recommend you just file the required Treasury FBAR and IRS Form 8938 and not worry about it. Life is too short to have the IRS on your back.
You should talk to a CPA and/or lawyer if you have any questions unique to your personal situation. When dealing with the IRS it’s best to be conservative and not make yourself a test case. Being a test case is expensive and stressful.
Finally, we need to consider the reasons for the geographic diversification in the Permanent Portfolio. It’s for serious emergencies, not hiding assets. If you aren’t engaged in criminal activity like money laundering, terrorism funding, tax evasion, etc. the IRS is not going to care about your reported gold. If they are looking to blanket seize assets from everyone, you still have protection because they won’t be able to just go into all these accounts and ask for the money. There will be huge problems with foreign jurisdictions, seizure laws, etc. Plus, you can get your own attorney to gum up the works in any kind of unlawful action like that.
Now if they are just coming after you personally for whatever reason, that’s another problem entirely and in that case you’re still better of reporting the asset than not. Courts can hold you in contempt for not repatriating assets and put you in prison until you comply. If you didn’t report the assets, and they find them (and they will when they go through your records and see you wired money out of the country to Acme Bullion Vault, Inc.), then you have another problem.
Don’t outsmart yourself!
Survival Podcast Interview Now Online
February 13, 2013
Thanks to Jack Spirko of The Survival Podcast for interviewing me. We touched on a number of interesting topics about the Permanent Portfolio that we discuss in extensive detail in our book:
The Permanent Portfolio: Harry Browne’s Long-Term Investment Strategy
Here are some of the topics we covered today:
- Why diversification into assets you don’t believe in is still important
- The best ways to buy an asset like gold
- Geographic diversification in today’s world
- Gold storage in places like Switzerland and The Perth Mint
- Many more
Here is the link to the show and you can also get it through iTunes:
The Survival Podcast Craig Rowland Interview
The Survival Podcast Tomorrow
February 12, 2013
I just finished an interview for The Survival Podcast which will air tomorrow at 10AM CST. Lots of talk about the Permanent Portfolio and especially gold with geographic diversification:
The Survival Podcast
Check it out! I’ll post a link tomorrow.