@Snoopy6-43 wrote:
How do you establish the current cost basis in a gift of coins??? You can gift money by check, thereby establishing a basis. However, the value of coins upon gifting must be legally documented, or the value of the coins itemized somehow.
The cost basis of a gift is NOT the market value upon gifting. The cost basis of a gift is whatever the giver's cost basis is. The giver's cost basis might be their purchase price, or it might be something else, depending on how and when the property was acquired. (For property that was previously used in a business, it is even more complicated.)
If the gift was more than $15,000 in value, then the giver was required to file a gift tax return. That establishes the cost basis. If no gift tax return was filed (because the gift was small enough that it did not require a gift tax return, or because the giver failed to file) then you have to rely on information from the giver to determine the basis.
It may be hard to document your cost basis in a gift, if the giver can't or won't provide it. The IRS does not view that as their problem. If you are audited and can't prove your cost basis, the IRS can determine the entire selling price is a capital gain.
