Question:
What does the term "premium" mean?

Answer:
This word when used in the context of a dealer transaction states the percentage or fixed dollar amount that a dealer is willing to pay a large wholesaler, financial institution, or federal government on each specific kind of coin.

Question:
How do commission work on bullion and coin transactions?

Answer:
A dealer usually has different commission rates, depending upon the particular product. For instance, bullion bars and bullion coins have a lower commission than rare or semi-numismatic coins. While bullion bars and coins are easier to acquire and require less time and effort than semi-numismatic and rare coins, commissions still can be found in a very wide range. Each investor/collector should be certain to know exactly what the commission he is paying – on both the buy and sell. Most companies charge commissions to both buy and sell bullion coins and other semi-numismatic and rare coins. It is our policy at Turamali, Inc. to not charge a fee when a client sells. This policy has been in place for the past nine years.

Question:
What does a bid/ask price mean to me as an investor?

Answer:
A bid/ask price is usually given to a dealer from a large wholesaler or financial institution. In other words, when one pays a commission to a dealer, he is also paying a commission to a large wholesaler or financial institution. Both large wholesalers and financial institutions work on tight margins and it is usually easy for the client or investor to get a large part of the initial premium back.

Question:
When a client sells his gold, silver, or platinum, which items must be reported?

Answer:
Form 1099B must be issued by a dealer to any client selling any of the following: gold bars, silver bars, platinum bars, palladium bars, gold one ounce Maple Leafs, gold one ounce Krugerrands, gold one ounce Mexican Onzas, and US 90% junk silver coins which carry a face value of $1,000+. Fractional Maple Leafs, Krugerrands, and Onzas do not have to be reported on 1099B. Since there are no CFTC-approved contracts for these items, they are not required to be reported. (See REV.92-103 Sec. #3)

Question:
Are dealers required to report the sale of Gold American Eagles?

Answer:
No. Gold American Eagles do not have CFTC-approved contracts. Therefore, these coins in any size are coins that do not have to be reported when a client sells.

Question:
I have heard that any coin that sells for a premium of 15% under the value of the inherent metal must be reported. Is this true?

Answer:
This myth originated because of Federal Register Item 49, #3 under the proposed rules dated Thursday, January 5, 1984 under Section 1.6045-1, and Section 2 D. It includes this clause, "2 – The term commodity does not include: D - A form of tangible personal property or an interest therein, gross proceeds from the sale of which exceed by more than 15% the value on the date of sale of the underlying personal property determined, at the election of the broker, by either exact evaluation or approximate evaluation." This proposed rule went into effect later under final regulations in the Federal Register Volume 57, #240 on Monday, December 14, 1992. When the final ruling came out eight years after the proposal, the 15% ratio was not mentioned on the coins. Also by then, the American government had begun to mint Gold American Eagles, which could not be purchased under CFTC contract. Therefore, there was no need for Eagles or the 15% premium to be mentioned since the definition hinged on the futures contracts.

Question:
Are there laws in effect that allow the government to confiscate gold, silver, or platinum coins?

Answer:
No. Public Law #99-185 that approved and authorized the minting of gold bullion coins again in the U.S. was signed into law and approved by Ronald Reagan on December 17, 1985. The act listed the coins as legal tender coins where gold could not be confiscated. However, anyone reading this realizes that laws can certainly be changed!

Question:
Have you heard of any pending laws that might allow the government to confiscate gold?

Answer:
No. To the contrary, our sources feel gold ownership in this country is so insignificant compared to the budget of the United States that confiscation would not run the government for many days anyway. Since the last confiscation sixty-five years ago, there has been a lot of fiat currency printed. Therefore, the probability of future confiscation is highly unlikely.

Question:
Why are some companies, that sell gold, claiming Gold American Eagles can be confiscated under current U.S. law?

Answer:
Perhaps those companies have not done their homework properly. Some "mislead" potential clients in order to sell pre-1933 numismatic coins. Companies selling gold (including Turamali, Inc.) make larger profits on the sale of pre-1933 numismatic coins. (We welcome any information relating to any law(s) contrary to what we have reported herein.)