@kjs94gt wrote:
@ColeenD3 Thanks for your answer as well. So, as you stated, "If you know about when it was purchased, you may be able to look at historical gold prices." I can't prove when any of it was bought originally. So how would I make an accurate assessment to appease the IRS and do my best to avoid any headaches? Am I just making a best effort attempt to be mostly correct? Is there any way to be completely correct? The donor officially handed the items over to us a few days before his passing. So, how do I handle this?
You aren't going to be completely correct unless you have receipts matched to the physical objects. For example, a coin bought in 2000 will have a lower basis than a coin bought in 2020. The taxable gain on each coin will be different. You need a specific inventory of each object with the value you have determined, and notes of how you determined the price.
A "fair" price might be the average price for the year the item was purchased. A conservative basis would be the lowest possible price for a specific item. For example, if you know your relative only started buying bars in 2017, then the lowest basis would be the lowest gold price between then and now. For dated items, the lowest possible basis would be the lowest gold price since the date.
However, the real lowest possible price is zero, and there is no guarantee the IRS will accept your valuations when you don't have specific receipts.
Make a detailed inventory, determine your best price for each specific coin or bar, and make notes of how you determined that price.
