selling silver bars

[mcmhome6015]

I have a friend who inherited about $50.000 in silver bars from her father about 25years ago. She is now in her late 70's and would like to sell the bars to pay living expenses. Because the silver was from an inheritance is the sale taxable? How much can she cash out without taxes per year? How does she calculate the tax that would need to be paid? From the date she inherited the silver? She is in Minnesota.

[rjs]

Yes, the sale is taxable. The amount of income that she will have to pay tax on is the increase in value from the date of her father's death to the date of the sale. Calculating the amount of tax, and how much she could sell without having to pay tax, depends on a number of factors. It's not something we can work out here. She should consult a local tax professional.

[rjs]

Precious metals, such as silver bars, are considered "collectibles" for income tax purposes. There are special rules and different tax rates for the sale of collectibles. It's not the same as selling stock or other ordinary investments. Again, your friend should consult a local tax professional.

[Hal_Al · Accepted solution]

 Physical holdings in gold or silver ("collectibles") are subject to a capital gains tax equal to your marginal tax rate, up to a maximum of 28%.  For most people that simply means it's taxed as ordinary income.

Try this tool, for estimating tax due: https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1

Enter your regular income first to see the regular tax. Then add the sale to see the effect.
Enter the estimated capital gain as other income (not as a capital gain).  The tool is not sophisticated enough to apply the 28% limit.  So, if she is a high income person that will not work.  But for higher income people, just assume the gain will be taxed at 28%. 

As others have said, the amount of income that she will have to pay tax on is the increase in value (capital gain) from the date of her father's death to the date of the sale.  Historical silver prices are readily available on the internet.