What tax to I pay on selling a coin I didn't pay an exact amount for?

I'm a tax lawyer...do you want the correct answer?

 

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If you sell $50k in one year and only have 199 transactions then no, the provider of the "Merchant Account" does not have the requirement to report it to the IRS, HOWEVER you still have the duty to report your income regardless. Whether you choose to or not is entirely on your conscience.

I will add that on a whimsical note, in that previous mentioned IRS Publication 525 it does state - get ready for this:

"Bribes. If you receive a bribe, include it in your income."

 

tax laws state , if you do this as a hobby , then you more than likely spent more buying coins , so if , you sell some , its still a loss . same concept on selling used items on eBay .. they cost more ,than you sold them for , no profit !!

 

I have done one of my family's probate, and there was only a couple of coins and a few silver bars, and since there was no paper work given/kept as to buying price, they were valued at current prices rather than gain. The stocks and property were easy to do as they were all well documented. So one concern if you plan to accumulate a large amount of coins under the radar, is what if you die suddenly and leave darkness for your family to struggle through trying to get assets distributed.

 

The chances for most of us to face a tax audit is slim, but once will change your mind on record keeping and honesty, even if you did it correctly and had no problems.

 

OP, never ever take legal advice from anonymous strangers on the internet. Browse the IRS publications and you should find your answer.

 

This whole discussion and no clear answers... Its about time to clean up our tax code. Nobody know the right answer. It is not possible.

 

That's a great idea. And all you have to do is out-lobby every special interest that gains advantage from the current tax code. Nothing could be simpler!

 

I thought you want them to pass at current value. Stepped up basis. The family member that gets them would pay very little in taxes if they sold them.

 

Not whimsical they are serious, income from illegal sources is reportable. That was decided back during prohibition and it was what they used to bring down the major bootleggers including Al Capone. Tax evasion for not reporting their illegal income. Technically any and all income from any source is reportable.

 

I never said it would actually happen

 

Understanding the internal revenue code is eminently doable. One needs to read much more and spout much less.

 

Here's a helpful link on the subject: https://turbotax.intuit.com/tax-too...axes--Brokerage-Accounts--etc--/INF22384.html

 

One problem - metals and/or coins do NOT QUALIFY for the preferential rate for long term capital gains, regardless of how long they are held. They are always taxed at the regular tax rates. One more reason they are an insane "investment". The times when metals outperform financial investments are few and short lasting. That said, during those infrequent and short intervals, their performance can be astonishing. It's a little like buying lottery tickets as an investment plan. Not quite that crazy, but almost.

 

As far as the IRS is concerned I've never sold anything for a profit. Which, sadly, is in fact true. Mainly because I only buy stuff.

 

There was no need to have cost basis, unless it was very high.

The estate can use the basis (cost) as of the date of death, or that as of 6 months later, which ever is higher, and by election.
Therefore, the "they were valued at current prices" was correct.

The other values, "The stocks and property were easy to do as they were all well documented." you may have overpaid the taxes due.

Estate taxes are a specialty, and you have to know the rules.
They are very different from regular income taxes.

 

Correct.
See previous post.

 

Maybe this person is an IRS agent.

 

Cheer up the thieves in DC will find plenty of victims to fleece besides you,stick it into your pocket and forget it happened......