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Dad didn’t trust banks. How to handle the hoard he left behind.

gliddenralston

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By LIZ WESTON
JUNE 16, 2021 5 AM PT
Dear Liz: My father was eccentric and given to conspiracy theories. He didn’t trust banks or the stock market and invested the bulk of his money in gold coins and bars. We are talking millions of dollars at current gold prices. My parents set up a living trust, so when my mother dies, I am confident the gold will be distributed equitably to myself and my siblings, without a lot of hassle in probate. But I have no idea how to convert all that gold into a more liquid investment like an IRA or money market fund. How do I do it and not be overwhelmed with fees and taxes?
Answer: Let’s hope the gold is safely stored and properly insured. It would be a shame if burglars walked away with your inheritance.
If your mother’s estate is large enough to owe estate taxes, the estate will pay those — not the heirs. (The current exemption is over $11 million per person, so very few estates owe this tax.)
Under current law, the gold will receive a new, “stepped-up” value for tax purposes on the day your mother dies, said Jennifer Sawday, an estate planning attorney in Long Beach. You should note the price of gold on that day, using a reliable gold pricing site, and print out the information for future tax purposes, Sawday said.

Once you receive the gold, you can take it to a precious metals exchange and cash it in. If the price you get is higher than the price of gold on the day your mother died, you would have a taxable capital gain. If the price is lower, you would have a capital loss. You wouldn’t owe any taxes and could use the loss to offset capital gains elsewhere or, if you don’t have gains, up to $3,000 of income per year until the loss is exhausted.
You can deposit the cash in a bank account, or open a brokerage account and choose your investments from there. Those investments might include a money market fund as well as stocks, bonds, mutual funds and so on.
An IRA is a type of retirement account, not an investment, and requires you to have earned income to contribute. The contribution limit is $6,000 this year, or $7,000 if you’re 50 or older, so you wouldn’t be able to put much of your inheritance into an IRA in any case.
 

the_shootist

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By LIZ WESTON
JUNE 16, 2021 5 AM PT
Dear Liz: My father was eccentric and given to conspiracy theories. He didn’t trust banks or the stock market and invested the bulk of his money in gold coins and bars. We are talking millions of dollars at current gold prices. My parents set up a living trust, so when my mother dies, I am confident the gold will be distributed equitably to myself and my siblings, without a lot of hassle in probate. But I have no idea how to convert all that gold into a more liquid investment like an IRA or money market fund. How do I do it and not be overwhelmed with fees and taxes?
Answer: Let’s hope the gold is safely stored and properly insured. It would be a shame if burglars walked away with your inheritance.
If your mother’s estate is large enough to owe estate taxes, the estate will pay those — not the heirs. (The current exemption is over $11 million per person, so very few estates owe this tax.)
Under current law, the gold will receive a new, “stepped-up” value for tax purposes on the day your mother dies, said Jennifer Sawday, an estate planning attorney in Long Beach. You should note the price of gold on that day, using a reliable gold pricing site, and print out the information for future tax purposes, Sawday said.

Once you receive the gold, you can take it to a precious metals exchange and cash it in. If the price you get is higher than the price of gold on the day your mother died, you would have a taxable capital gain. If the price is lower, you would have a capital loss. You wouldn’t owe any taxes and could use the loss to offset capital gains elsewhere or, if you don’t have gains, up to $3,000 of income per year until the loss is exhausted.
You can deposit the cash in a bank account, or open a brokerage account and choose your investments from there. Those investments might include a money market fund as well as stocks, bonds, mutual funds and so on.
An IRA is a type of retirement account, not an investment, and requires you to have earned income to contribute. The contribution limit is $6,000 this year, or $7,000 if you’re 50 or older, so you wouldn’t be able to put much of your inheritance into an IRA in any case.
or just keep the gold in the basement in a safe (or two)
 

gliddenralston

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If you leave your kids a hoard the new cost point for them would be the price of pm's the day they inherited them. Would the dad be tax liable from his cost point or not?
 

the_shootist

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If you leave your kids a hoard the new cost point for them would be the price of pm's the day they inherited them. Would the dad be tax liable from his cost point or not?
I never thought about it since all my PMs are at the bottom of a lake. Only my kids know which lake

The government can suck my cold, lifeless dick for their tax money when I'm gone
 

gliddenralston

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I'm with you, slowly sell them off for cash, instead of all at once. why would anybody want to trade millions in pm's for a bunch of traceable depreciating fiat...don't volunteer to play their stupid game.
 
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specsaregood

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But I have no idea how to convert all that gold into a more liquid investment

The thing about liquids is, they have a tendency to evaporate.
 

MrLucky

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Would the dad be tax liable from his cost point or not?

The above answer, answers the question very well. Dad is dead. that's it. He doesn't owe tax on the step up in value as he cannot benefit from the increase.

The mention of "if the estate is large enough to pay estate taxes"
1. varies by state.
2. depends on the class of the beneficiary. if class1 - children, no estate tax, if class 2 - other people, yes to varying amounts based on relationship to the deceased.
3. depends on the value of the estate, over 11 million is mentioned.

Some states have an "estate" tax and an "inheritance" tax. So you may avoid one, but not the other. Really need an accountant to answer the question correctly.
 

gliddenralston

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Somebody just confessed they have millions in gold laying around, bad move, thieves, guns and love ones will make you talk.
 

Someone_else

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The big problem is that there is more than one heir, and one of them is going to talk about the gold.
 

Bottom Feeder

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Capital gains??
Unh... I was under the impression gold was a 'collectible' for tax purposes.
That's up to 28% tax on gains and zip for losses.
So maybe @Agavegirl1 could comment on that.

BF
 

MrLucky

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Gold is just a yellow metal with no value. Why does everyone think it's valuable when they find it?
 

the_shootist

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Gold is just a yellow metal with no value. Why does everyone think it's valuable when they find it?
Since there's no value tied to that old relic there's no such thing as taxes on it. Anyone who wants to pay their taxes as the government demands, go for it
 

Buck

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that's why i'm continuing to teach my heirs about an exit strategy...first mine, then theirs
 

Fiat Metaler

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If you leave your kids a hoard the new cost point for them would be the price of pm's the day they inherited them. Would the dad be tax liable from his cost point or not?

Your tax is only on the excess of the amount received over the basis. Your basis is what was paid for the property. At death, one currently gets a step up in basis. (Biden is trying to do away with this which is a huge hidden tax increase. A lot of old people don't have records from decades ago.)

So if a person dies when silver is $30, and a month later the heir sells it at $31, then there is taxable income of $1.

The character of the income is ordinary because its a collectible, not a capital gain. Different rules apply for the character of the gain on futures and stocks.
 

edsl48

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Your tax is only on the excess of the amount received over the basis. Your basis is what was paid for the property. At death, one currently gets a step up in basis. (Biden is trying to do away with this which is a huge hidden tax increase. A lot of old people don't have records from decades ago.)

So if a person dies when silver is $30, and a month later the heir sells it at $31, then there is taxable income of $1.

The character of the income is ordinary because its a collectible, not a capital gain. Different rules apply for the character of the gain on futures and stocks.
Stepped up basis is what allows farmers to depreciate their great grandparents farm buildings over and over. I have read Biden's proposal and noted the agriculture interests are already squawking. My guess is that Biden will never get that through any more than other presidents have tried to. Heaven forbid farmers would have to pay taxes.
 

Goldbrix

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By LIZ WESTON
JUNE 16, 2021 5 AM PT
Dear Liz: My father was eccentric and given to conspiracy theories. He didn’t trust banks or the stock market and invested the bulk of his money in gold coins and bars. We are talking millions of dollars at current gold prices. My parents set up a living trust, so when my mother dies, I am confident the gold will be distributed equitably to myself and my siblings, without a lot of hassle in probate. But I have no idea how to convert all that gold into a more liquid investment like an IRA or money market fund. How do I do it and not be overwhelmed with fees and taxes?
Answer: Let’s hope the gold is safely stored and properly insured. It would be a shame if burglars walked away with your inheritance.
If your mother’s estate is large enough to owe estate taxes, the estate will pay those — not the heirs. (The current exemption is over $11 million per person, so very few estates owe this tax.)
Under current law, the gold will receive a new, “stepped-up” value for tax purposes on the day your mother dies, said Jennifer Sawday, an estate planning attorney in Long Beach. You should note the price of gold on that day, using a reliable gold pricing site, and print out the information for future tax purposes, Sawday said.

Once you receive the gold, you can take it to a precious metals exchange and cash it in. If the price you get is higher than the price of gold on the day your mother died, you would have a taxable capital gain. If the price is lower, you would have a capital loss. You wouldn’t owe any taxes and could use the loss to offset capital gains elsewhere or, if you don’t have gains, up to $3,000 of income per year until the loss is exhausted.
You can deposit the cash in a bank account, or open a brokerage account and choose your investments from there. Those investments might include a money market fund as well as stocks, bonds, mutual funds and so on.
An IRA is a type of retirement account, not an investment, and requires you to have earned income to contribute. The contribution limit is $6,000 this year, or $7,000 if you’re 50 or older, so you wouldn’t be able to put much of your inheritance into an IRA in any case.
She gives him legal information, but does not advice him to save as much as possible.
 

Goldhedge

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yeah, that's what I would do, turn Constitutional money into fiat.

Actually, I'd be converting it to dirt...
 

Avalon

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By LIZ WESTON
JUNE 16, 2021 5 AM PT
Dear Liz: My father was eccentric and given to conspiracy theories. He didn’t trust banks or the stock market and invested the bulk of his money in gold coins and bars. We are talking millions of dollars at current gold prices. My parents set up a living trust, so when my mother dies, I am confident the gold will be distributed equitably to myself and my siblings, without a lot of hassle in probate. But I have no idea how to convert all that gold into a more liquid investment like an IRA or money market fund. How do I do it and not be overwhelmed with fees and taxes?
Answer: Let’s hope the gold is safely stored and properly insured. It would be a shame if burglars walked away with your inheritance.
If your mother’s estate is large enough to owe estate taxes, the estate will pay those — not the heirs. (The current exemption is over $11 million per person, so very few estates owe this tax.)
Under current law, the gold will receive a new, “stepped-up” value for tax purposes on the day your mother dies, said Jennifer Sawday, an estate planning attorney in Long Beach. You should note the price of gold on that day, using a reliable gold pricing site, and print out the information for future tax purposes, Sawday said.

Once you receive the gold, you can take it to a precious metals exchange and cash it in. If the price you get is higher than the price of gold on the day your mother died, you would have a taxable capital gain. If the price is lower, you would have a capital loss. You wouldn’t owe any taxes and could use the loss to offset capital gains elsewhere or, if you don’t have gains, up to $3,000 of income per year until the loss is exhausted.
You can deposit the cash in a bank account, or open a brokerage account and choose your investments from there. Those investments might include a money market fund as well as stocks, bonds, mutual funds and so on.
An IRA is a type of retirement account, not an investment, and requires you to have earned income to contribute. The contribution limit is $6,000 this year, or $7,000 if you’re 50 or older, so you wouldn’t be able to put much of your inheritance into an IRA in any case.
This is exactly why you have to be careful with leaving your kids silver and gold. There is always that one kid who is oblivious and is going to run to liquidate having no idea what they are doing. I'm hoping there is a plan for GIM to be around a long time because many of our kids will do the same. If I peg out soon I have told the daughters to come here before they do anything.
 

Goldbrix

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I'm hoping there is a plan for GIM to be around a long time because many of our kids will do the same. If I peg out soon I have told the daughters to come here before they do anything.
Now that is an issue that raised its ugly head this past year. Whether or not it has been resolved seems to remain silent for now.
 

coopersmith

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What gold?

Do I know you?

:don't know:
 

Avalon

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Now that is an issue that raised its ugly head this past year. Whether or not it has been resolved seems to remain silent for now.
I missed that. Are you talking about the demise of the forum :oops:
 

coopersmith

for fuck sake..........
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You are a good chic. If you tip over I hope your kids come around, we will help em the best we can.............

as my old man is fond of saying, 'it takes 4 generations to build true wealth, and one generation to destroy it.'
 

CrimsonGuardJay

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This is exactly why you have to be careful with leaving your kids silver and gold. There is always that one kid who is oblivious and is going to run to liquidate having no idea what they are doing. I'm hoping there is a plan for GIM to be around a long time because many of our kids will do the same. If I peg out soon I have told the daughters to come here before they do anything.
Yes, but that should be easy. As long as said kids have even a modest intellect... you should be able to easily sit them down and have a discussion for under 20 minutes, where you clearly show them what "spot price" is, where to find it on a daily basis, and firmly state that is essentially the *bare minimum* that these bars or coins is worth.

Then, if there's any coinage, or graded coinage, explain that there's "collectible value" that should be considered, I.E. a 1992 gold eagle with a perfect MS70 grade is certainly worth a premium over spot, just like certain coins of very limited mintages like French commemoratives and the like.

However, back to the original statement, if Dad dies and leaves behind only simple bars and standard coins, then it should be easy as pie.
 

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If I peg out soon I have told the daughters to come here before they do anything.
and ask questions with an open mind to learn something about the history of money....
 

Avalon

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You are a good chic. If you tip over I hope your kids come around, we will help em the best we can.............

as my old man is fond of saying, 'it takes 4 generations to build true wealth, and one generation to destroy it.'
Aww, thanks. The Daughters are good kids. A little intense like their mom. :p The youngest went on mask strike, by the middle of the pandemic. The oldest is busy fighting the local school system who seems determined to abuse her kid through pimping vaccines, continued masks and now the covid testing for schools. I keep telling them to come here and let it out because they are driving the men in their life crazy.
 

coopersmith

for fuck sake..........
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We are all a bunch of weirdos. We need to stick together.
 

Cigarlover

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I hate to be the one to say it but Dad failed. If his kids are asking stupid questions like this he definitely did not educate them properly.
No banks, wealth outside the system. dad was definitely a genius. Sad that his kids don't see it. Brainwashed by the system.
 

Goldbrix

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I missed that. Are you talking about the demise of the forum :oops:
We are wearing out our chief cook and bottle washer, and evidently we are at a crossroads for our technically savvy MODs. There is a lack of quality and dedication in handing over such responsibilities to those who have volunteered to run this ship.
It really is a HUGE responsibility.
Me, I got the computer skills of a Brook Trout. (As the Mods here can testify too).
I'ma monkey with a keyboard.
 

the_shootist

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Now that is an issue that raised its ugly head this past year. Whether or not it has been resolved seems to remain silent for now.
We take it a day at a time and keep our fingers crossed
 

Avalon

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We are wearing out our chief cook and bottle washer, and evidently we are at a crossroads for our technically savvy MODs. There is a lack of quality and dedication in handing over such responsibilities to those who have volunteered to run this ship.
It really is a HUGE responsibility.
Me, I got the computer skills of a Brook Trout. (As the Mods here can testify too).
I'ma monkey with a keyboard.
I get it. I moderated a forum of women one time. Lord have mercy ! This place is kind and gentle in comparison. Its a lot of work and a lot of expense. I sure would miss this place and seriously appreciate all the hard work and dedication that goes into it.
 

Hystckndle

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RE: The OP.
Bejeebus...
Now the younger ones are bitching about gold falling from the sky.
Every day...sumptin' new.
:) :)

( eccentric conspiracy old coot left you a pile of tangible non taxable no traceable physical gold and you
wanna turn it into all that it is not ....ya...ya....I get it )
 

coopersmith

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RE: The OP.
Bejeebus...
Now the younger ones are bitching about gold falling from the sky.
Every day...sumptin' new.
:) :)

( eccentric conspiracy old coot left you a pile of tangible non taxable no traceable physical gold and you
wanna turn it into all that it is not ....ya...ya....I get it )
bunch of forking boneheads............I wish somebody would give me some gold, I had to buy all mine........
 

spinalcracker

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I hate to be the one to say it but Dad failed. If his kids are asking stupid questions like this he definitely did not educate them properly.
No banks, wealth outside the system. dad was definitely a genius. Sad that his kids don't see it. Brainwashed by the system.



exactly

if dad was a “conspiracy theorist “ he forget to tell the kids to hide the gold and silver , do not declare it , and hide it on an island which will probably cause the boat to sink
 

Avalon

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bunch of forking boneheads............I wish somebody would give me some gold, I had to buy all mine........
shoot, the way my family was with money we were happy if they died not leaving us a big debt. :2 thumbs up:
 

Agavegirl1

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Capital gains??
Unh... I was under the impression gold was a 'collectible' for tax purposes.
That's up to 28% tax on gains and zip for losses.
So maybe @Agavegirl1 could comment on that.

BF
There is no one standard way of reporting the sale of gold coins on your tax return. How you report the sale and any possible tax owed depends on your specific circumstances. The tax rules are different for people who regularly sell gold coins with the intent of earning profits, for those who collect coins as a hobby and for taxpayers who hold onto their gold coins as an investment.
 

Son of Gloin

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Going to this Liz person is like going to Dave Ramsey, when you have a question about what to do with gold and silver you either bought or inherited. His answer is always stupid; “Sell it and buy good growth mutual funds.” His advice is awesome, while he’s telling people to avoid debt or retire it with all haste, if they already have a bunch of it. It goes to crap after that.
 

Buck

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for people who regularly sell gold coins with the intent of earning profits, for those who collect coins as a hobby
that's me...just keep paperwork on what i sell to my business from my personal stash and everything under that account is liquidation, this account over here is for 'swapping', all taxes paid both ways...

i'm the delta smelt of earning profits, not really making much above final costs nominal, while i'm the perfectionist from hell with my hobby, always swapping up...which explains the nominal profits...
 

Agavegirl1

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that's me...just keep paperwork on what i sell to my business from my personal stash and everything under that account is liquidation, this account over here is for 'swapping', all taxes paid both ways...

i'm the delta smelt of earning profits, not really making much above final costs nominal, while i'm the perfectionist from hell with my hobby, always swapping up...which explains the nominal profits...
Good for you! Always helps to keep good records.