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Financial Q&A: gold-coin sales tactics and taxes

Submit your questions to Steve Dinnen at: money@csmonitor.com

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Q: My mother-in-law wants to convert some gold coins, specifically American Gold Eagles and Canadian Maple Leafs, into CDs and/or money market funds. How does one convert gold coins into cash in order to do this? What are the IRS reporting requirements?

R.S., via e-mail

A: From high-end jewelers to coin dealers to pawnshops, you'll have little trouble finding buyers for those coins. But to maximize your profit, Alan Olsen, a certified public accountant in Fremont, Calif., with Greenstein, Rogoff, Olsen & Co., offers a few tips:

•Locate a reputable dealer. In addition to the Better Business Bureau and other resources, the US Mint's website (usmint.gov) lists dealers by state.

•Call around, as prices to buy and sell can vary greatly. In addition, prices change continually throughout the day, so try to get a time commitment for how long a quote will be valid.

•Be very wary of TV, Internet, and "get cash fast" ads.

As for taxes, Mr. Olsen notes that collectibles sales can be subject to a steep 28 percent federal capital-gains rate. (Stocks, securities, and many other investments typically carry a 15 percent long-term capital gains rate for most taxpayers.)

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