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digger68
03-12-2013, 02:24 PM
I have been made an offer in the lower six figures for all of my gold claims. I am into these claims for very little money if you just look at my initial investment. While I really dont want to sell all of my claims the offer is a hard one to pass up. My question to those of you who have made similar sales is this: How bad are they going to hit me on the taxes? Do capital gains taxes apply here? I want to make sure that I am not missing something while I am considering their offer. Anyone have any experience with such matters?

chickenminer
03-12-2013, 07:41 PM
digger...
Boy I am no accountant or tax person so take this with a huge grain of salt.

How do I put this .... I know this person ... no wait, I have this friend. He did almost exactly what you are describing. Sale was a tad more than your offer but ballpark.
His tax person said he would get hammered on capitol gains for the difference between what he paid (investment) and what he sold for. Ouch !
Now this person was not in dire need of money so he didn't need a lump sum. Plus he knew the people buying the ground.
Creative thinking is the key here. Maybe low downpayment .... further payments in gold.
Really a great deal depends on the buyer/seller relationship. Good sound agreement in writing too!

Again .... take it for what it's worth. For that kind of money I would consult with a competent person on tax law.

Good luck and congrats!

AKdredger
03-13-2013, 07:49 AM
I think you are correct Dick on the captial gains. You will have the sell price of the claims minus your basis cost (initial cost of claim minus any costs to improve it, annual fees, possibly depletion of the minerals taken out) the remaining is profit and therefore taxable. A tax person will be able to tell you if real estate is treated the same as stocks ie: long term or short term holding and applicable rates. If you are making a big profit Digger you can probably afford the tax bill and still come out great. I would rather not pay taxes either, the trade for gold will work to stay somewhat under the radar, but I recently read a training document the IRS published for its auditors on how to audit the small scale placer miner. They list several methods that most of us have been using for years. I suspect just owning a claim will soon trigger a visit from our friends in suits and ties. The link is below.

http://www.irs.gov/pub/irs-mssp/placer.pdf

digger68
03-13-2013, 07:49 AM
Thank you Dick you were actually the one I was thinking about when I asked the question. I will deffinitly be talking to a tax person. In some ways I wouldnt mind talking myself out of this deal. I think that there is a heck of alot of gold down at bedrock but I dont know if I can ever afford the million or so it will take to get the 100 feet down to bedrock.

overtheedge
03-13-2013, 09:18 AM
Thanks AkDredger for the IRS link.
eric

chickenminer
03-13-2013, 09:27 AM
digger...
Well that is just it. We have to ask ourselves if it is really worth it. To me stripping 100' of overburden has no appeal. I'd sell in a heart beat and look for something else shallower if I wanted to mine.
Comes down to what we are looking for in life. I like working alone, low yardage simple operation. I may never see a 1000 ounces a season, but I'll bet I'm happier and more stress-free than 99% of the guys that do!

Another thing ... if you ever want to buy equipment do it with the sale money.

carter
03-13-2013, 06:58 PM
Wow 100', I work at a interior coal mine and know what a 100' pit looks like and what it takes to get that deep. Lots of money$$$$$ I am on a road project now and we have 2 cat 777(100ton) trucks, a 992 loader & a d10t dozer, sometimes a second d10. We truck around 10,000 yd. per 12hr shift. probably 10hr of actual running. Now figure out how many yd. you need to move!!! I would guess we burn 600-800gal. per shift

fineswme
03-13-2013, 07:06 PM
Digger ,

I think I remember you saying before your claims are to the south of Denali ; are you near the Valdez creek area ??? Is one of your present neighbors interested in your claims ???

Given you know "Good" Gold is there:
Keep in mind, good gold bearing claims are only going to become more valuable in the future and I believe that to be a fact, others may disagree...

I'd suggest holding the claims and leasing with royalty/percentage payments possibly made in gold or cash (what you do at that point is up to you :rolleyes: ) ; make sure your annual moneys are paid "AHEAD" of commencing to mine each season ... Then take the annuals to prospect claims better suiting your needs regarding the capital investment it would take to independently mine on your own ...

digger68
03-14-2013, 07:42 AM
Yes fineswme they are located in the Valdez Creek area. Where else does a man have to go 100' to hit the bedrock?LOL. Having dug two pits for mines in this area I know the size of hole that needs to be made to get that deep. one of the biggest issues is dewatering the pits as the water table is fairly close to the surface. I think chickenminer had a good point, get some money and go hit my other claims where bedrock is only 10' down. I dont think they are as rich as the claims I am selling but I dont need to make as much if I can keep it simple. Buy a 300 Hitachi and spend the summer smiling and making some gold without the pressure of having to hit it big.

The problem I have seen in this area with leasing my claims for a royalty is that most of the guys go broke before they get to the gold. There may be 1000s of ounces down there but it does take 7 figures to get it out. As Cater said lots of money to dig a pit that deep.

Thank you AKdredger for the link. I found it interesting. Taxes and death, been trying to avoid both of them for most of my life. :)

carter
03-15-2013, 06:26 PM
Are you or do you know the man that had 2 volvo 40ton 6x6 dumps at cantwell a couple of winters ago?

digger68
03-15-2013, 08:06 PM
Yep Carter, that would be Norton. Another guy who went broke chasin deep gold in Valdez Creek. Why you ask? Wondering about the pay dirt that got dumped by the road when the trucks thawed out the next spring? Some of the Cantwell guys did alright workin that dirt. The trucks were 1/3 full of frozen pay dirt when they came out in November that year and the next spring the man that owns them came to retrieve his trucks and dumped them out before transporting them back to Palmer. The last time I looked there was still some left. It really needs a metal detector ran over it. There was some nice nuggets being found at the mine that fall. Those Volvo trucks IMO are some of the best there is. A couple of years ago we had 3 Case 35 ton trucks that were leased brand new. Total junk ! There was seldom a time when all 3 trucks were up and running at the same time. Always 1 was down for some reason and more than once we had 2 of them down at the same time. I was keeping 3 trucks hustling to keep up with me digging and whenever we would lose a truck it really hurt production. I love Valdez Creek and there is tens of 1000s of ounces of gold left out there but it is a challange to mine.

digger68
03-15-2013, 08:19 PM
Carter are you working on a road at Usibelli or the one to the wind power project? That is a heck of a road they were building to the wind generators. I was out there early last spring prospecting and was shocked at the size of that project. Sure a great area. Real nice country.

carter
03-18-2013, 08:23 PM
Jumbo dome(mountain) is just south of the towers. We are making access to mine coal at western base of the mountain. Nothing to do with GVEA

carter
03-18-2013, 08:28 PM
Wow, small state!!!
I was one of the dummies from Healy down their chipping chunks to pan in the garage!! The next wk we went back to cantwell(-20 below) the "claim owner" was standing their!! Funnnnny!!!!! He told us all about it and wanted me to snomachine out their and weld on his equip. for him. Never happened.



Yep Carter, that would be Norton. Another guy who went broke chasin deep gold in Valdez Creek. Why you ask? Wondering about the pay dirt that got dumped by the road when the trucks thawed out the next spring? Some of the Cantwell guys did alright workin that dirt. The trucks were 1/3 full of frozen pay dirt when they came out in November that year and the next spring the man that owns them came to retrieve his trucks and dumped them out before transporting them back to Palmer. The last time I looked there was still some left. It really needs a metal detector ran over it. There was some nice nuggets being found at the mine that fall. Those Volvo trucks IMO are some of the best there is. A couple of years ago we had 3 Case 35 ton trucks that were leased brand new. Total junk ! There was seldom a time when all 3 trucks were up and running at the same time. Always 1 was down for some reason and more than once we had 2 of them down at the same time. I was keeping 3 trucks hustling to keep up with me digging and whenever we would lose a truck it really hurt production. I love Valdez Creek and there is tens of 1000s of ounces of gold left out there but it is a challange to mine.

carter
03-18-2013, 08:33 PM
A coworkers spouse works for dot and said they were getting repoed and roaded them to cantwell and didnt know of they ruined any bridges with all that weight, dumped the load at cantwell to make weight for the semi trucks to hual them away. I didnt get rich.