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

Here is what I understand about the tax a person must pay when selling a coin.

If I pay $100 for a coin and sell it for $200 I will have to pay capitol gains tax on the $100 profit and that is it. The percentage I pay is equal to the amount of taxes I pay based on my income tax bracket up to a max of 28%.

Is this correct? And if so..

I recently purchased ones of those MIXED LOT OF U.S. COINS!! PROOF, UNCIRCULATED.... blah blah blah. I didn't actually get taken advantage of too bad like I was expecting to. I paid a grand total of $27.98 for the lot and I appraised it at a little less than $40.00.

My question is, if I want to sell my coins individually what do I use as my "purchased" price for the individual coins if they were purchased in a lot. Like if I sell the silver Iowa statehood proof that I got in the lot for $10.00 how much would I deduct from that profit to pay tax on?

I think I got about 15 coins. I will have to double check when I get home. Would I divide the total that I payed for the lot by the number of coins I got and use that average as the individual purchased price of each coin?

I'm sorry if this question is dumb or too confusing. I'm new to the hobby and don't really know if the selling tax is something I should even be concerned about. I just want to have all of my ducks in a row or whatever before I start selling off the coins I have been buying.

Thank you for any info/help you can give me!

 

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Unless you sell out of brick and mortar store that requires a license and State and Federal tax stamp. You have no taxes to pay.
But if you sell over coin $9999.99 dollars then you will have to pay taxes.

 

Do not listen to this advice, it is wrong.

I do not know how to calculate the basis for each coin a group lot, but you have the idea right how to calculate the taxes owed.

 

LOL. This kind of advice could land you in prison or worse, a huge tax bill.

 

No not will less than $100.00 coins. No way!

 

Yes way. Any income you earn you pay tax on. Hopefully no IRS people are stalking this thread, or you might be getting a visit, jello

 

I been audited two times and know tax law well.I was not change in fact they had to pay me. I had over paid for three years.

 

Thanks for everyone's help! I will just make sure I keep really good records of all purchases and sales for when I visit H&R in January.

 

First the Chinese are spying here on us now the IRS

 

Hey , will the feds pay me if I lose money .

 

Just a personal opinion , find a CPA as they will usually be cheaper than H&R Block .

 

No one really cares about the fine details. It's not cost effective to scrutinise every dime or every dollar. As long as the overall figures are halfway reasonable you can be pretty sure they will not be coming round to see every cent accounted for.

It is far more revenue efficient to concentrate on easy targets, retailers with nice fixed costs and expenses that are easy to audit.

All you really need is an overall figure for annual profit or loss. Earn millions and you may be a person of interest,earn thousands and someone may take a casual glance, earn hundreds and just stuff it in your wallet and forget it.

 

Frank where are you?

 

No, but almost. Any capital losses may be used to offset capital gains on other pieces, and up to $3000 of additional capital losses may offset other types of income each year. Never pay taxes on gains without also taking loss credits against it.

 

Everyone has been very helpful! This is nice information.

Am I correct in assuming if I were to spend $15 or whatever to get a coin graded I can also write that off against the gain?

 

Absolutely! It all goes into the cost basis on the asset you sold.

 

Yes, in addition to any other reasonable expenses associated with buying or selling the coin, including hotel/grading fees/books, etc.

 

If your starting a business, do yourself a favor, spend some time finding a good CPA.....