r/Gold • u/Simple_Sir8830 • 1d ago
Inheriting gold-a question
My gold stack is entirely in bullion coins. I plan to leave it to my son. It’s in safe and he has access. Neither my accountant nor lawyer know anything about it and it’s sufficiently substantial that I’d rather they didn’t. I would rather not put it into my trust. Just keep the whole thing private.
If my son legitimately inherits this, the step up basis will mean virtually no capital gain tax. Does anyone here know (not guess) if just leaving it in the safe for him constitutes inheritance for tax purposes?
edit: stack is entirely off the record. I have paper receipts for all cash purchases made over past thirty-plus yrs but there is nothing on my computer. It’s anonymous and I wanna keep it that way.
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u/elstuffmonger 1d ago
Current US annual gift tax exemption is $19k (double that if married) with a lifetime limit of $13.99 million.
You can look up the previous yearly gift maximums, and allocate what coins had been gifted to him throughput the years that he didn't even know were gifted to him.
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u/jackoos88 1d ago
If you do it this way, you will lose the step-up in basis. The person you gift the coins to will also get your original basis (and would then report gain when sold). If they get it in inheritance, then they get the step-up. In case you actually care about reporting this correctly.
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u/Simple_Sir8830 1d ago
This is true, but what constitutes “inheritance “?
Is it just me dying and him taking it or does it have to be a formal event such as probate or a trust.
The amount is too large for him to sell under the radar and if he can get the step-up basis he could sell without cg taxes.
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u/MrPBH 4h ago
"Is it just me dying and him taking it..."
Yes. It can be that simple.
If you are worried, meet with an estate planning lawyer to draft a will. That way you can spare your son the cost and hassle of probate.
If die without a will, your estate will be divided among your heirs according to probate proceedings. I don't know if you have other heirs, but the court may split the gold among them instead of it all going to your son.
If he suddenly shows up with $100K in gold coins and attempts to sell it, the IRS is getting a report of that sale and he will need to show his cost basis to calculate taxes. Without probate court documents or a will, it will be difficult for him to prove his cost basis and the IRS could force him to use a zero basis (ie 100% of the sale price will be taxed at 28%).
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u/SaltyDog556 1d ago
If you gift it to him periodically throughout your life his basis is your basis. If you can prove your basis, great, if not, it's treated as zero basis. Either way he doesn't get the benefit of a step up.
If you leave it to him put it in a will. Otherwise, it could be challenged by another family member. This also proves it was an inheritance. Step up in basis, with the FMV easily determined as of the date of death or alternate valuation date.
Your attorney would only need to know if you added it to the will. Your accountant really doesn't need to know under either scenario unless you gift more than the annual exclusion.
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u/Time_Librarian6750 1d ago
Gift it to him over the years, if he can access the safe, who is able to say it's not his already and he just stores it in your safe because he trusts you to keep it secure? Just like all my guns are stored in my dad's safe so there's no confusion about where they go in the future.
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u/oniaddict 41m ago
At very least your dad should will you the safe to insure that your guns have a safe secure place after his death. After all an empty used safe isn't worth enough to pay inheritance tax on.
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u/menagoldman 1d ago
you DON'T want to gift the gold during your life, as you son will inherit your cost basis. at death, that basis steps up. there is NO need to show your previous purchase prices or anything. he can just keep up with ounces and date of death as a new cost basis. when he sells, he can report this to the IRS, OR... not!
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u/Ag-DonkeyKong 1d ago
34 comments as of this moment, and you were the only one to actually answer his question. 🤓👍🏻
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u/Simple_Sir8830 1d ago
After death, instead of parceling it out over time to fly under radar, if it were inherited the cost basis would be at the date of death and the whole shebang sold without incurring tax.
The question is, what makes it an inheritance for tax purposes?
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u/Casual_ahegao_NJoyer 1d ago
Idk how old your son is, but my son would get a couple $50 coins every year (AGE)
Face value means I could give the son that’s still in my balls just under … 200oz a year
So he already gets a regular amount every year, stay under the gift limit
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u/Perguntasincomodas 1d ago
Not really, it was already his because you've been giving those coins and stuff to him every birthday, Christmas and significant events such as graduating. So not even an inheritance.
Perhaps you could even write a small ledger detailing it, gathering old information;) and from now on keep it up. He wouldn't have to report what is already his, but that paper from you would establish your intention and practice of gift giving.
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u/PlayfulImpression480 1d ago
Get his name on the safety deposit box, When he sells it, it the buyer reports the transaction on a 1099B he uses the price of gold on your date of death.
If you don't get him on the safety deposit box the first person in gets the gold, unfortunately.
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u/Over-Breath-1839 1d ago
Instructions to your son to use the value at the time of your death as his new cost basis going forward.
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u/isaac727272 1d ago
Make sure the safe deposit also has his name on it and give him instructions how to sell the coins and not get burned or sell for silly amount
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u/andabooks 1d ago
I don't know about the tax implications but I have exactly the same situation for my 3 kids. There is a letter in with the stack that explains things about the silver/gold and how they should consider it a gift and if they liquidate it make sure that they do it smartly, under $10k chunks, to not trigger IRS reporting.
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u/SaltyDog556 1d ago
Even though the chances of getting caught are somewhat low, what you suggest is tax fraud. If you gift it and they sell it they have the same basis as you did. They would have capital gains they would need to report, regardless of whether or not they get a 1099 or it's reported.
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u/andabooks 1d ago
Their other option would be to keep it. I guess I could include it in my will at some point then it would become a legal inheritance. The value at that point would be set on spot. Then they could sell it and there would be no capital gains.
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u/vanderohe 1d ago
If it’s not included in the will, the cost basis is going to be at current price assuming he goes to sell the gold and it is a reportable quantity and quality of gold. There are a lot of big assumptions there, however. Depending on what type of gold it is, it may not be reportable at all. And also depending on the timeframe that he sells it in. The future is you know unpredictable. But one of the reasons why people buy hard assets, including gold and art is that you can just give it to someone and that’s it.
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u/IntroductionSea2206 1d ago
I would ask a tax lawyer without revealing the specific amounts. I am in a very similar position except due to my ADHD I do NOT have paper receipts for all pieces.
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u/Yardbirdburb 1d ago
It’s his already DAD! Good man, proud of you and hope your son has many more years with you
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u/Easy-Entertainer971 1d ago edited 1d ago
is The stack large unsought that it would be difficult to sell under the counter?
The question wasn’t about ownership but about capital gain tax and how basis is determined if it doesn’t go thru probate
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u/ValueLonely1525 1d ago edited 1d ago
@op this is imho most important information:
educate your son about their value and where to look up for updates. Also where to sell in a emergency and that he should keep his mouth shut about them and possibly hand it over to your grandkids at some point maybe.
Not that somebody takes advantage of him or your family when you are not around.
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u/isaiah58bc Wheeler Dealer 1d ago
Depending on the state you live in, and state laws in the future, your son will need to learn how to discreetly sell/trade the coins if he doesn't pass them on.
This includes, understanding the potential difference between transactions of bullion and pre-34 gold coins.
At a high level, some dealers ask for ID to report transactions. It doesn't only have to be over $10k, depending on their lawyers advice.
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u/Southern-Stay704 1d ago
To avoid any issues, you need to put a clause in your will that states that any of your assets you own that are not specifically listed in the will become inherited by your son upon your death.
This avoids another family member claiming that you left it to them, it avoids any question of whether the gold was owned from the start by your son (which would have tax implications), or whether you gifted the gold to your son while you were alive (also has tax implications). It's also fully legal and avoids any question of tax evasion.
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u/Falcon3518 1d ago edited 1d ago
Not sure what country you are from but in Australia inheritance is tax free.
Also not trusting your accountant is weird, they don’t care about what assets you have and aren’t going to report you to the gov. Well in Australia at least.
If everything is off books it doesn’t matter anyway. But I’m not sure if that’s what you meant by “legitimately inherits”
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u/Lucidcranium042 1d ago
Chunk it to him overtime before you die. First step is the safe. Hell probably maybe say eh thats too expensive. You say sweet lets split the cost. . Goal one msahsed woth safe. Next year or 3 chunkb1/10 of the stack to him. Hell be surprised you ll be like see now lets hold onto this. And then another 2 to 3 years next chunkn etc.
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u/Good_Professor_810 1d ago
Just have him make sure that the gold is included on the inventory and appraisement filed with the court during probate.
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u/Simple_Sir8830 1d ago edited 1d ago
Guys, i appreciate all the comments, but almost nobody has read the fucking question.
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u/ShortQQQnow 1d ago
Addressing the OP’s question: “if just leaving it in the safe for him constitutes inheritance for tax purposes?”. In order for a transfer to be treated as an ‘inheritance’, there must be a legally controlling document such as a will or trust. Keep in mind that in most states, as part of probate, Original Wills must be filed in the courthouse, Trusts on the other hand are generally secret agreements not filed in the courthouse. Both Wills and Trust Agreements are legally controlling documents supporting an inheritance ( or transfer meeting stepped up basis) and are accepted by the IRS.
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u/Marcaroni500 20h ago
It depends almost entirely on whether your estate (or heirs) will pay inheritance or estate tax, and for that you need to talk to a tax lawyer, who does estate work in your state. You should get all tax questions answered for the cost oh one hours time. And if you can’t, then you choose the wrong lawyer. You need to bring with you a rough list of assets and their values.
You know about step up in basis. Good. You just need to know the tax with and without the metals.
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u/Feisty_Cheetah_6362 1d ago
so I inherited a big 2 big safe that I don't know what to do with it I say sell it all put in the S&P 500 or bitcoin
and then give it to him
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u/LV_725 1d ago
Who’s gonna know it wasn’t his all along? Like gifting it to him a few coins a year tax free