How to gift an ounce of gold to each of my adult children?

[MCD9861]

I have two 1-ounce bars of gold that were given to me with no records from a friend a couple of years ago. I want to pass them along to my son and daughter as Christmas gifts, one bar to each of them. I would not want them to have to pay capital gains on the entire amount when they choose to sell them. I don’t know how to establish the base price.  Does anyone have any instructions on how to do this correctly and establish a record? 

[pk]

@MCD9861 , note that  a gift  has   (a)  basis  same as that of the donor  and (b)  if below the  yearly free amount does not require any reporting.

The best /sure way to avoid  capital gains tax on a "gift"   is  not  gift  to the recipient but  pass the item as inheritance i.e. use the basis  "step-up" at the passing of the donor.   Keep the item  ( ear marked  for the recipient ) as  marital/ family asset    as inheritance  for the recipients. 

Does this answer your query ?  Or  have I mir-interpreted  your question ?

[MCD9861]

I very much appreciate your taking the time to respond, but I still have the same question. Thank you very much for your time!

I don’t know how to establish the cost basis because my friend gave me these two bars of gold in 2022. He put them in my hand and said, “Here, these are for you.” I have no paperwork and he died 18 months later, so I can’t ask him for any receipts.

I would like to wrap these for Christmas and give them to my son and daughter as a gift. They are young adult adults and I don’t want them to have to wait another 0 to 30 years for me to die before they can use them. 

What I was trying to learn is how I can establish the cost basis so that when they sell their gold at a time that is most useful to them, they will only pay capital gains on the actual gain from the time it was given to me.  Based on your answer, maybe that doesn’t even matter? 

I think you are trying to help me understand that they can each sell their one ounce as long as the payout is under the amount that the gold buying company is required to report (I think that is currently $10,000 or less). I’m reading that hold is predicted to go up around $3000 per ounce in 2025. At that price and because they are so young, I guess if I give them this gold, they will both sell LONG before it could ever reach near $10,000. 

Is that all I need to know? 

Thank you!!! 

[pk]

@MCD9861 , in that case  ( i.e. you want to gift  the bars  for Christmas ), just ignore  all other consideration  and put these under the tree. Their basis ( for  Cap gain/loss purposes  and in the distant future ) would be the same as yours, which is  Fair Market Value  when you received  these as gift  ---  You can use  KitCo, JMBullion, Yahoo etc. for  spot gold price  around thew time your friend  bought  ( or failing that, when you  the gift ) the  1 oz. bars.  All you are trying to do is "best effort" determination.    Note that depending on circumstances  and/or desires, people often convert the bars to Jewlery  and the ignore the basis, because they never intend to sell the  bars.   Others ignore everything and  hold the item till passing on to his/her progeny as gift.  It is not worth worrying about because the  future  is so uncertain.

That is my view on this.

Is there more I can do for you ?

Merry Christmas

pk

[MCD9861]

Thank you. 

I guess we are to make our best guess as to what the rules are so we can hope to follow them. 

I am going to give them. I still have no idea how one records or proves their base value at the time they are gifted. Given that my son and daughter are in their 20s and who’ll likely sell them in the next year or two, the transaction would not be reported since it be so far below $10K. After many hours of searching articles over the past few months, that is all I can gather.