How to handle taxes and appraising of inherited gold and silver coins or bullion
Millions of Americans have gold or other precious metals in their IRAs. Indeed, they can serve as a helpful hedge against inflation or an economic downturn. But they also present certain challenges to the heirs of anyone with a precious metal IRA.
With individual stocks, there is a clear question of whether or not inheritors in an estate want to sell or hold onto the stocks. But gold and silver have both an investment component and a physical component. Individuals often buy gold or silver for its appearance as well as its added value to their investment portfolio or retirement account.
So if you inherit precious metals, here are some steps you can take in order to better understand your investment and what to do (and what not to do) with it.
Find Out What You Have
The first step when inheriting gold or other precious metals is to find out exactly what you have. In some cases, a precious metal IRA will display the exact amounts that an individual owns and in what form (bullion bars or coins).
The estimated value of a set of gold or silver assets will be the cost of the metals. That value can fluctuate on a daily basis with the metal’s spot price. This process becomes more complicated if an individual had specific gold or silver products in their IRAs. The prices for old gold or silver coins, for instance, are controlled by a number of different factors including rarity, quality, and unique features. As a result, people who inherit rare coins usually choose to take them to a precious metals expert and have them professionally appraised.
Appraisers will analyze the coins and give you an idea of price based on their rarity, quality, and weight in precious metals. This step is imperative to understanding what value an asset has and whether or not it is worth holding onto or selling.
While there are costs associated with most IRAs, you may have been inherited a particularly rare coin that is projected to increase in value. If the coin is projected to be valuable enough, it may change your calculus surrounding the entire IRA.
Examine the Costs
Next, those who inherit gold or silver should look at the costs associated with their inheritance. Estate taxes do not typically kick in until a person is inheriting large amounts of money—in the millions of dollars. However, there may still be expenses depending on the amount of precious metals being considered.
A small collection of gold coins or a piece of gold jewelry, for example, may be kept safely in a home. But for large quantities of precious metal bullion, an individual must consider storing their inheritance in a secure vault or a safe deposit box at a bank. In addition, there may be monthly or yearly expenses as long as you hold onto the precious metals.
The costs associated with should also be taken into consideration. Fees are often charged to appraise the metal and the assets must be securely transported to the buyer. People holding onto rare coins may need to have those coins professionally cleaned or placed into protective case.
It also may take tremendous time and effort to find someone who is willing to pay the right price for a particular gold or silver asset that you were given. All of this time and effort could be postponed if you decide to hold onto the coins or bars.
Decide on Whether to Keep or Sell
Ultimately, only you can make a decision about whether to keep the precious metals you were inherited or sell them. If you decide to sell, we recommend working with a trusted dealer to conduct an official sale. The sale should come with a receipt for tax purposes.
Remember that you may also be responsible for capital gains tax, depending on the activity of the precious metals since it was inherited. If you want to keep the gold or silver, then you must decide how and where to store it.
Inheriting precious metals is sometimes a stressful experience. The metals may be heavy and scattered in a number of different places. It may take time for you to even find out what the assets are valued at. But once the metals have been appraised and gathered, it is possible for a person to get the information they need to make a decision about what to sell and how much to sell for.
At this point, you will be ready to make the most out of your precious metal inheritance.