Panning for Gold

8 Pages Posted: 8 Sep 2010

See all articles by Joel S. Newman

Joel S. Newman

Wake Forest University - School of Law

Date Written: September 7, 2010

Abstract

Most tourists who engage in gold panning find gold which is worth less than their price of admission to the gold mine. From a tax standpoint, they have nondeductible, personal losses. Those precious few who find gold which is worth more than their price of admission should not have taxable income unless or until they sell the gold to a third party. Due to the valuation and allocation difficulties inherent in measuring basis and amount realized, there should be no realization event when the gold is panned. Alternatively, the gold panning activity can be viewed as producing tax free, imputed income, at least until the later sale event.

JEL Classification: Federal Taxation, Imputed Income, Gain or Loss, Recognition and Deductibility

Suggested Citation

Newman, Joel S., Panning for Gold (September 7, 2010). Wake Forest Univ. Legal Studies Paper No. 1673405, Available at SSRN: https://ssrn.com/abstract=1673405 or http://dx.doi.org/10.2139/ssrn.1673405

Joel S. Newman (Contact Author)

Wake Forest University - School of Law ( email )

P.O. Box 7206
Winston-Salem, NC 27109
United States

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