@kjs94gt wrote:
@Opus 17 I understand and appreciate your input. However, I don't want to "hope" I'm not audited. I want to do things right so if I am audited, I can be prepared to answer honestly and as accurately as possible. This is why I'm here asking questions. This is why tax is such a difficult situation because there are multiple different answers from people who believe they are correct. I'm not a tax professional so I just want to find the right answer.
Some gold has been bought over 20 years. Most had been bought in the last few years (2017-2020). I have no way of proving what he bought or when as we also don't have access anymore to old credit card receipts. I wish this was cut and dry but it appears it won't be.
If you sell the gold, the only thing you have is hope. Unless you decide to report the basis as zero and report the entire proceeds as taxable capital gains.
You can do as much research as you can to establish a reasonable cost basis, but if you can't prove it, then you are at risk in case of audit.
You will want to make an individual inventory.
A coin minted in 2010 could not have been purchased in 2009 or earlier. It's cost could only have been the price of gold after 1/1/2010. You might choose the price on 1/1/10, or the average price for the year, or the lowest price of gold since 1/1/2010,, which is the lowest possible price the gold could have been purchased for.
Then if you have a bar stamped 2017, do the same research. If you want the least risk of being challenged by the IRS, try to establish the lowest price it could have been purchased for.
But unless you want to pay tax on the entire sales price, or you are willing to bury the gold until your children inherit it, you are going to have to include some level of hope when you sell it.
