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<p>[QUOTE=&quot;Publius2, post: 7481251, member: 105571&quot;]Let me preface these comments by saying that I am an engineer by profession, not a tax advisor, financial advisor, CPA or any other of the recognized experts on tax and estate planning.&nbsp; But you can&#039;t get through life without learning some things.&nbsp; My advice is always to consult the experts for such complicated matters while retaining your own ability to judge that advice.</p><p><br /></p><p>For collectors that are selling their own collection during their lifetime, the IRS treats the sale of your collectibles (art, cars, coins, bullion) as a short-term capital gain.&nbsp; That is a typical rate of 28% (it can vary) on the difference between what you paid for it (called the &quot;basis&quot;) and the sale price.&nbsp; If the gain is positive, that is a capital gain.&nbsp; If negative, that&#039;s a loss which can be used to offset some other income on a very limited basis.&nbsp; If you don&#039;t have receipts and records, then you have no way to credibly establish the basis value.&nbsp; That puts you in a very untenable position with the IRS and you are unlikely to be fond of their interpretation since they generally are not inclined to &quot;take your word for it&quot;.</p><p><br /></p><p>For legitimate dealers, the issues are different since the coins are not collectables but rather business inventory and we won&#039;t get into that here.</p><p><br /></p><p>For inheritances, the original purchase price doesn&#039;t matter much except to inform the heirs as to the potential value of the items and how seriously to deal with the disposal.&nbsp; If you inherit a collection that has some non-trivial value, a new &quot;basis&quot; value is established during the time that the estate is being probated.&nbsp; At this time, the collection should be appraised by a qualified expert and a written appraisal produced for your use in the probate records.&nbsp; You should pay for the appraisal since that helps establish the <i>bona fides</i> and independence of the appraiser for both the probate court and the IRS.&nbsp; Once the new basis value&nbsp; is established, then any sale of the coins either during probate or after probate clearance is compared against the new basis value for the purpose of computing capital gains/losses.</p><p><br /></p><p>Now, here&#039;s the tricky part.&nbsp; If you inherited a coin collection but did not put the collection into probate with a new appraisal to establish that new basis value, then at some later date when you want to sell those coins, your capital gain must then be measured against what your forebear bought them for.&nbsp; If your forebear did not keep records or you threw them out, then you are in a fix.&nbsp; (Note:&nbsp; I do not know if you must probate the collection in order to establish a new basis value or if a valid and credible appraisal by itself alone is adequate.&nbsp; That is a question for the experts.)</p><p><br /></p><p>Of course, if someone intends to operate in the underground economy, not pay their legally-owed taxes, and commit civil and criminal infractions then none of the above will make any difference.&nbsp; But I don&#039;t recommend it by any means.</p><p><br /></p><p>BTW, the new administration and Congress are debating increasing the top capital gains tax to 38% or more.&nbsp; Who knows if they would make it retroactive to the beginning of 2021 but they&#039;ve done that before.&nbsp; So, if you are thinking about selling a collection this year, you might want to keep track of this issue and plan accordingly.[/QUOTE]</p><p><br /></p>

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