If you’re paid in gold, do you have to pay taxes?

Here’s an interesting anti-tax strategy: A Las Vegas man has been paying his employees in gold coin. Because the coins have a face value that is less than their actual worth (because pure gold is so valuable) they are claiming that they don’t have to pay tax, since the face value is so low.

I’ll explain that better: The Canadian Mint is selling a “50-cent” coin made of pure gold. But, if you click on that link, you’ll see that they’re selling it for $100. So if you’re owed a $500 paycheque,  and you get handed five of those gold coins, let’s say you’d be satisfied. And, since they are technically 50-cent coins, you could claim that you really only earned $2.50.

The government begs to differ, and wants its back taxes.

Now, I’m not up on the Las Vegas or U.S. tax code, but if the gold-laden employees wanted to buy, you know, food and stuff with the hard-earned precious metals, presumably they’d have to sell it for real currency. And wouldn’t they need to claim the “profit” they made selling a 50-cent coin for $100 as a taxable income?

Perhaps that would be akin to the Canadian capital gains tax, and maybe it’s a lower rate than the income tax?

At any rate, it’s the government (through the mint) that decides a $100 coin is only going to be “worth” 50 cents, so it’s their fault, right?

After all, I pay taxes on the face value of the $500 I earn, not the worthless piece of paper the paycheque is printed on. So shouldn’t it work the other way around?

Or think about this: What if my boss was a celebrity — say Brad Pitt. And for some reason, he insists on paying me with personal cheques. So, on each of my paycheques, I also have a valuable autograph. After I cash them, I can also sell them on eBay. Should I be including that in my income tax?

I don’t know — I’ll be watching to see what the judge says, that’s for sure.

There’s some weirdness out there in the coin world, I’ll tell you. Just browsing on the Royal Canadian Mint site, I found that they offer a $4 silver coin for $43, which makes the gold 50-cent one look like a bargain! But check this out: they also offer a triangular coin (shaped kind of like a guitar pick) with a face value of 50 cents and a price of $35. And a hologram. Yes, a freaking hologram in the coin.

Oh, and a couple of years ago, they poured a 100-kilogram gold coin (the world’s largest) that’s got a face value of $1 million, and they were selling it for nearly three times that much.

Perhaps we know what happened to the missing gold? They probably used it up making coins in the shape of a Mobius strip, with a face value of eleventeen.

But here’s a video if you like gold coins: