We Buy Gold…FIFA World Cup Trophies

Originally published in the Cedar Street Times

June 27, 2014

As a young lad, I played a lot of soccer.  The first team I was on was called the “Half-Pints.”  I think I was four or five years old, but I can still remember our green and white uniforms and the coach wearing jacked-up tube socks with colored stripes along the top.  When I was six and seven I played on the “Chiefs” – I am not sure that team name and logo with the Native American headdress would be allowed today.  Around that time, I also played on the “Jedis” – probably because the original Star Wars trilogy was in its heyday.

By the time I was in middle school, my brother and I were both on traveling soccer teams often playing at opposites ends of the state on any given Saturday.  We played a fall outdoor season, a winter indoor season, a spring outdoor season, and then attended soccer camps during the summer.  In high school I played on regular club teams as well as the high school team.  One very vivid memory was winning the state championship my junior year in high school.  The opposing team had two players that went on to play in the MLS, one of which even played on two U.S. World Cup teams.  I went to college and played a few more years there until other priorities began to emerge.

Throughout my time playing soccer, there was one thing that eluded me – a real gold trophy!   Cheap plastic trophies at the end of a season, or after winning a tournament remained pretty consistent.  They seemed like treasures when I was young and most survived through the years with only minor dents and scratches.  A few unlucky ones had lost an appendage or their fake gold hair paint had rubbed off leaving the embarrassing white plastic beneath.  Eventually, they all got round-filed save one early trophy as a momento.

If I had only managed to keep playing, gain citizenship in a powerhouse soccer country, join the national team, and then win the World Cup, my dream could have been realized! With the World Cup currently in full swing, some country is only two-and-a-half weeks away from holding the world’s most valuable trophy. Not only in symbolic worth to the world, but also in perceived collectible value and sheer melt value, the FIFA World Cup Trophy is the world’s most valuable trophy.

The trophy is not gold-plated as most other major sports trophies are, but its 13.6 pounds is made almost entirely of 18k gold.  If you took the championship trophies from the NHL, NFL, NBA, and MLB and melted them all down, their combined value would be worth only about 28 percent of the melt value of the World Cup Trophy, which currently has about $200,000 of gold in it with an estimated collectible value of $10 – $20 million.

What does this have to do with taxes? – Not a whole lot, but it was a good excuse to talk about soccer. I will say this: buying and selling gold has been quite popular since the markets bottomed out in 2009.    It seems that everybody has a sign that says, “We buy gold.”  I think I even saw that written on the back of an “Anything will help” sign from a panhandler.

There are a lot of special tax and regulatory rules surrounding gold sales, so you need to make sure you get the right advice before you buy a bunch of gold or gold coins thinking you are making a solid investment to protect you from inflation.  For instance, if you owned the FIFA World Cup Trophy, you would be subject to special collectibles tax rates of 28 percent if you tried to sell it, as opposed to lower long-term gain rates even if held over a year.   People wanting to hold gold directly in their IRAs also have special rules to follow regarding the purity of the gold they purchase, in order to maintain the tax deferral.

So, scout it out before you buy gold!  Besides, it’s better to just win the gold.  Go USA!

Prior articles are republished on my website at www.tlongcpa.com/blog.

IRS Circular 230 Notice: To the extent this article concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law.

Travis H. Long, CPA is located at 706-B Forest Avenue, PG, 93950 and focuses on trust, estate, individual, and business taxation. He can be reached at 831-333-1041.

Advertisements

No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: