Dear Liz: When my mother passed away nine years ago, I inherited some gold coins. At the time, it was difficult to go through her life’s belongings and part with things. Now that gold prices are so high, I’m wondering if it makes sense to sell those coins? I’m not sure holding on to them makes a lot of sense, but would appreciate any advice you might have.
Answer: Gold coins can be a good hedge against inflation as well as a portable source of wealth. But you need to store them securely to guard against theft and they probably should be insured, which can raise the costs of ownership.
If you want to turn your coins into cash, make sure to get at least three quotes from different sources such as reputable coin shops and jewelers. Also discuss the sale in advance with your tax pro. The difference between the value of the coins when you inherited them and their sale price would be considered a capital gain. Gold coins are taxed as collectibles, which means they’re subject to a 28% federal capital gains tax rate.
Hi Liz. Love your column. Regarding the inherited gold coins question, why would anybody tell the IRS they inherited coins and subject themselves to a 28% capital gains tax? That seems very illogical.
Oh, my.
However
Liz failed to mention on the inherited gold coins.
I do not think u must pay capital gains tax.
When inherited you get a stepped up cost basis for the value at feather. So even though they bought for $100 and now worth $4800 no tax if sold.
Check this and amend advice.
Notice that it’s been nine years since she inherited the coins. Only the appreciation during her mother’s lifetime would be untaxed. Any appreciation since the inheritance would be taxable.