[Congressional Record Volume 147, Number 79 (Friday, June 8, 2001)]
[Senate]
[Page S6009]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REID (for himself, Mr. Allard, and Mr. Ensign):
  S. 1007. A bill to amend the Internal Revenue Code of 1986 to treat 
gold, silver, and platinum, in either coin or bar form, in the same 
manner as stocks and bonds for purposes of the maximum capital gains 
rate for individuals; to the Committee on Finance.
  Mr. REID. Mr. President, today I am introducing the Fair Treatment 
for Precious Metals Investors Act.
  Investors may be surprised to discover that investments in precious 
metals are taxed as ``collectibles'' similar to vintage wines and rate 
coins, subjecting them to higher capital gains tax rates than other 
commodities.
  Historically, precious metals bullion has been a rarity, and was 
valued more for its uniqueness than for its metal content, but today, 
precious metals bullion coins are specifically designed and produced by 
governments to be used as an investment vehicle similar to stocks and 
bonds.
  Precious metals bullion can be a valuable and stable asset for 
investors, but as long the Tax Code penalizes investment in precious 
metals, this commodity will remain largely unattractive.
  The Fair Treatment for Precious Metals Investors Act will update the 
tax classification of precious metals bullion (that is, gold, silver, 
and platinum), and give precious metals holdings the same capital gains 
tax preference that stocks, bonds, mutual funds, and other capital 
assets are currently afforded.
  Precious metals are vital to Nevada's and our nations economy.
  Nevada is the third largest producer of gold in the world, behind 
Australia and South Africa, giving the United States a trade surplus of 
gold exceeding $1 billion.
  Undoubtedly, much of the gold that the United States Government uses 
to produce its gold bullion coins comes from Nevada.
  Gold has been valued for centuries, and it continues to be an 
important commodity to investors today.
  Although the value of stocks and other investment commodities may 
fluctuate drastically, gold's value has remained relatively stable over 
time.
  In today's volatile market environment, gold's stability promises to 
make it an even more attractive investment.
  Only in the last 30 years have governments such as the United States, 
Canada, Mexico, Australia, Austria, and South Africa minted precious 
metals bullion coins to serve as a way for investors to diversify their 
holdings with tangible assets. Prior to that time, precious metals 
bullion was a rarity, and was valued more for its uniqueness than for 
its metal content. Today, bullion is used as a safe, convenient, and 
affordable way to invest in precious metals.
  In 1997, the Taxpayer Relief Act corrected the Tax Code to allow 
precious metals bullion coins held in IRA accounts to be taxed at the 
same rate as stocks and other capital assets. The Tax Code simply needs 
to be updated to further accommodate the changes in investor 
opportunities and preferences.
  I am pleased that Senators Allard and Ensign have agreed to cosponsor 
this bill. I look forward to receiving the support of other Senators on 
both sides of the aisle to correct this tax inequity.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1007

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Fair Treatment for Precious 
     Metals Investors Act''.

     SEC. 2. GOLD, SILVER, AND PLATINUM TREATED IN THE SAME MANNER 
                   AS STOCKS AND BONDS FOR MAXIMUM CAPITAL GAINS 
                   RATE FOR INDIVIDUALS.

       (a) In General.--Subparagraph (A) of section 1(h)(6) of the 
     Internal Revenue Code of 1986 (relating to definition of 
     collectibles gain and loss) is amended by striking ``without 
     regard to paragraph (3) thereof'' and inserting ``without 
     regard to so much of paragraph (3) thereof as relates to 
     palladium and the bullion requirement for physical possession 
     by a trustee''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2000.
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